Interest rates to remain high amid inflationary pressures, United Capital

Nigeria's interest rates are projected to stay elevated through the second half of 2026, driven by ongoing inflationary pressures, United Capital Plc indicated. The company's Group Chief Executive Officer, Peter Ashade, cited the impact of elevated oil prices, stemming from the US-Iran conflict, as a key factor contributing to persistent inflation and rising bond yields.

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With inflation still above the various Central Banks’ targets owing to impact from elevated oil prices (triggered by the US-Iran war), Inflation is expected to remain sticky as oil supply shocks persist.

Despite the challenging macroeconomic outlook, United Capital delivered a robust performance in the first half of 2026. Profit after tax surged by 77.5% to N21.10 billion. This growth was fueled by strong performance across its core businesses, including investment banking and financial services, alongside increased trading income and expanding fee-based revenues. The group's unaudited results for the six months ending June 30, 2026, showed profit before tax climbing 79.6% to N24.78 billion, with gross earnings up 57.8% to N37.49 billion.

Operational efficiency also improved, with the cost-to-income ratio dropping to 44% from 50%. Shareholders' funds expanded by nearly 25% to N187.09 billion, and total assets reached N1.64 trillion. The asset management subsidiary, managing over N1 trillion for more than 100,000 investors, saw its mutual fund assets under management grow by over 350% since 2021.

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We delivered a strong first-half 2026 performance, with profit after tax rising 77.5 per cent to N21.10 billion, as the investment banking and financial services group benefited from robust growth across its core businesses, higher trading income and expanding fee-based revenues.

Looking ahead, United Capital expects global interest rates to remain high amid continued inflation. However, the company is optimistic about future growth, identifying technology-driven investment opportunities and expansion across African markets as key drivers. Its 2026 strategy will focus on business expansion in Africa, product innovation, financial inclusion, digital transformation, and enhancing assets under management to solidify its leadership in investment services.

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We expect global interest rates to remain elevated amid persistent inflationary pressures, while competition for funding is likely to intensify.