By Goddy Egene, 07.01.2010
Skye Bank Plc, one the banks that passed the 2009 stress test of the Central Bank of Nigeria (CBN) has projected a profit before tax of N10.36 billion for the third quarter ending September 30, 2010.The profit, according to the figures made available by the Nigerian Stock Exchange (NSE) yesterday, would be recorded from the forecast gross earnings of N61.94 billion in the same period.
Despite the challenges of 2009, the bank had recorded gross earnings of N126.67billion for the year ended December 31, 2009 as against N74.62 billion achieved in 2008. Its net interest income rose by 54.52 per cent, from N30.47billion to N47.09billion; which is indicative of a high degree of efficiency in the management of its interest expense, and quality earning potential.The Bank also took its high quality earnings capacity a step further, recording an increase in operating income from N51.94billion to N75.02billion, an equally remarkable growth of 44.44 per cent.Skye Bank had ended the year with profit before tax of N2.15billion, and profit after tax of N1.13billion, respectively in a period many banks incurred huge losses due to provisions for bad loans.
Market analysts said the N10.6 billion forecast for Q3 by the bank is achievable given strategies being put in place by management. The bank recently realigned and refocused its business policy in a move geared towards greater efficiency and resource optimisation in line with its growth and industry leadership agenda.The new business policy emphasises up scaling the bank’s activities in the strategic sectors of the economy as well as concentrating on and deploying its expertise and competences to specific business areas where it enjoys comparative business advantage.The bank had explained that the new arrangement led to a review of its out-sourcing policy on staff and other third party supply process in order to streamline its staff engagement process.
According to Skye Bank, because of its new business and operational focus, it discontinued its Direct Sales Agents (DSAs) structure, by which contract officers mobilise retail deposits on its behalf. Consequently, such Direct Sales Agents are no longer engaged for its retail business The DSAs were first engaged about two years ago to mobilise retail liabilities (savings and current accounts) to deepen the retail business of the bank. However, with the change in the business focus of the bank, their continued need has been overtaken by events.
A leading international finance and research firm, Renaissance Capital recently adjudged Skye Bank Plc as the fifth largest bank in Nigeria after the recently concluded CBN/NDIC special audit of all the money deposit banks.