Sovereign Trust seeks shareholder approval to raise N20 billion capital

Sovereign Trust Insurance Plc has announced plans to raise up to N20 billion in new capital and will seek shareholder approval at its 30th Annual General Meeting (AGM), scheduled for 25 September 2025.

In a notice submitted to the Nigerian Exchange, the insurer disclosed that the proposed capital injection could be undertaken through various equity fundraising methods, including public offers, private placements, or rights issues. These may be executed either domestically or internationally, with pricing to be determined via book-building or other market-based valuation processes.

The company also disclosed that another key item on the AGM agenda is the proposed remuneration for Non-Executive Directors for the 2025 financial year, which has been set at N10.5 million, subject to shareholder consent.

Alongside these special resolutions, shareholders will receive the company’s audited financial statements for the 2024 financial year, together with the accompanying reports from the Directors, Auditors, and the Audit Committee. The re-election of directors and approval of remuneration packages for both management and external auditors will also be presented for endorsement.

The board has recommended a dividend payout of N0.05 per share (5 kobo on every ordinary share of 50 kobo), pending approval at the AGM. If sanctioned, shareholders whose names appear in the Register of Members as at the close of business on 5 September 2025 will be eligible for the payment, which is expected to follow immediately after the meeting.

This proposed dividend comes on the back of a solid financial performance. For the half-year period ended 30 June 2025, the company posted a pretax profit of N1.5 billion, up from N1.1 billion recorded in the corresponding period of 2024.

The earnings growth was supported by a sharp increase in insurance revenue, which rose to N34 billion, reflecting a 44.6 per cent year-on-year jump. After deducting service and reinsurance expenses, the company reported an insurance service result of N2.6 billion, compared to N2.2 billion in the previous year.

Investment income contributed N1.05 billion during the period, a slight rise from N1.02 billion in the same period last year. The robust investment returns, along with improved operational efficiency, helped sustain the pretax profit after accounting for operating and finance costs.

Sovereign Trust also reported a stronger balance sheet position. Total assets grew modestly to N28.2 billion from N27.9 billion, while retained earnings climbed to N2.2 billion, up from N1.8 billion a year earlier.

On the Nigerian stock market, Sovereign Trust Insurance has enjoyed a breakout performance in 2025, in line with broader positive sentiment in the insurance sector. The stock, listed under the ticker *SOVRENINS*, began the year at N1.12 but experienced an early dip, falling to N1.00 in January and N0.98 by the end of the first quarter.

However, from May onward, the share price began to rebound, gaining strong momentum through June. The third quarter proved to be its most active period, with the stock surging by over 112 per cent on a trading volume of 710 million shares.

Year-to-date, Sovereign Trust shares have appreciated by more than 154 per cent, fuelled by renewed investor confidence and underpinned by solid operational and financial results.