Skye Bank to Raise N15bn Fresh Capital

Skye Bank to Raise N15bn Fresh Capital

By Emele Onu, 08.22.2010 

Skye Bank Plc is to raise about N15 billion in fresh tier-one capital, aimed at boosting its shareholders’ funds by 17 per cent from N88 billion at year-ended December 31, 2009 to N103 billion. A source at the bank told THISDAY that the funds will be raised via special placement, adding that it is already generating excitement among prospective local and international investors.

The shareholders of Skye Bank had at their Annual General Meeting (AGM) last May, authorised the bank to raise about N100 billion in equity and debt over the next two years.According to the bank’s management, the current placement constitutes the equity part of the proposed funding programme, while the balance will be sourced through long term debt that will be raised in the course of the two-year period. The special placement is to be offered at a price of N7.00, representing a 9 per cent discount to the market price of N7.66 per share.

Sources said Skye Bank would consider raising additional capital on a periodic basis as a deliberate policy aimed at efficiently achieving its growth and expansion aspirations as various opportunities unfold within the local and international markets. The former Group Managing Director of the bank, Mr. Akinsola Akinfemiwa, had disclosed early this year that Skye Bank might acquire any of the rescued banks. The bank, as we gathered, also plans to continue to operate as an international bank under the new banking model introduced by the Central Bank of Nigeria (CBN).

The new leadership of the bank, led by Mr. Kehinde Durosinmi-Etti said one of its primary focus will be to position the institution as one of Nigeria’s most efficiently run banks based on the fulcrum of integrity, conservatism, best-practice governance, customer accessibility, robust risk management and continuous creation of shareholder value. Skye Bank, a product of mergers during the banking sector consolidation of 2005, was one of the ten banks that passed the joint examination conducted by the CBN and the NDIC, last year.

The bank’s capital adequacy ratio was 16.83 per cent at the end of the 2009 financial year, above the regulatory minimum of 10 per cent. The bank announced gross earnings of N126.67 billion for the year ended December 31, 2009, an increase of 70 per cent as against N74.62 billion achieved in 2008. In addition, the bank's net interest income rose by 55 per cent, from N30.47 billion to N47.09 billion.

It declared an increase in operating income from N51.94 billion to N75.02 billion, up by 44 per cent. It also recorded profit before tax of N2.15 billion and profit after tax of N1.13 billion. The bank’s loan portfolio increased by 29 per cent, from N246.39 billion to N317.76 billion in the previous financial year.

In the first quarter ended March, 31, 2010 the bank announced unaudited gross earnings of N24 billion and profit after taxation of N2.2 billion amid the challenges of the local and global economies and the Nigerian banking industry.



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