THURSDAY, 03 JUNE 2010 01:13 ABDUL IMOYO
Skye Bank’s strategy of pushing up earnings by deploying Information & Communication Technology (ICT) through its strong e-channels structure paid off in the last financial year as the bank reported rising income and profits.
Gross earnings were up 69.76 percent and net interest income rose 54.52 percent as the bank intensified efforts to at attract profitably priced deposits from various institutional and private sources during the year.Specifically, Skye Bank’s total gross earnings stood at N126.67billion for the year ended December 31, 2009 as against N74.62 billion achieved in 2008. Similarly, the bank’s net interest income rose by 54.52 per cent, from N30.47billion in 2008 to N47.09billion. Analysts regard this performance as a measure of efficiency in the management of interest expense, and quality earning potential.
The bank also recorded 44.4 percent increase in operating income from N51.94billion to N75.02billion. However, profits were moderated by the mandatory provisions for loans as it declared a profit before tax of N2.15billion, and profit after tax of N1.13billion, respectively.During the financial, year the bank’s loan portfolio was up 28.97 percent from N246.39billion to N317.76billion. Indeed, the first quarter, 2010 profit of N2.8 billion has helped revive confidence in the bank with a share price that is regarded as undervalued of late. Investors are now hoping that high level of organisational focus and consumer confidence in the Skye brand would help in shaping the valuation of the stock in the medium to long term.
“We do expect competition to get tougher and the tailwinds from recent loan provisions to turn into headwind to enable us push dividend up from 5kobo per share that was declared in 2009 financial year,” said an official of the bank.It is expected that the bank would leverage on recent reduction in interest rates, and increase its earnings potential in the current year.
Strength The bank’s recent achievements such as its appointment as the primary lending institution (PLI) under the Cabotage Vessel Financing Fund Scheme (CVFF) by the Nigeria Maritime Administration and Safety Agency (NIMASA), having met all the requirements listed by NIMASA as a PLI are seen as an indication of confidence. The Bank won this mandate on the backdrop of having won the Maritime Bank award in 2007.
Besides, the bank is expected to continue to leverage on its significant market share in revenue collection, electronic channel (e-channel) deployments, Independent Power Projects, real estate, oil and gas, hospitality, and construction.
Capital Raising Among the key resolutions passed at the bank’s annual general meeting (AGM) recently in Abuja, was the board’s request to raise fresh capital of up to N100billion either by way of equity or bond issuance, in such tranches and in such manner as may be determined by the directors. The proposed capital raising exercise would take place once the necessary regulatory approvals have been obtained.
It is believed that a robust capital base would further enable the bank to be active both in the regional field and across the globe. Already, it has subsidiaries in Sierra Leone, the Gambia and Guinea, with plans to open more offices in other countries.