Skye Bank Aims at the Sky with Acquisition of Mainstreet Bank … Recovers from Downturn in Profits in 2014 to a 85% Rise in Q1 2015

The saying that; “you reap what you sow” is very true with Skye Bank plc. But the period of sowing is not usually palatable. That was also the bitter pill Skye bank had to live with during its financial year ended 2014.
How do one explains a situation where the bank’s retained earnings grew by 71.1 per cent in its audited financial report for that period under review, but profit after tax reclined 51.35 per cent?
The bank’s retained earnings rose from N19.7 billion in 2013 to N33.7 billion in 2014. But the bottom line, most key performance indicator to investors and the public plummeted reasonably. But with the harvest becoming ripe, the future of the bank is now aiming at the sky.
For year ended December 2014, Skye Bank Plc reported total assets of N1.42 trillion during the financial year ended December 31, 2014, which represents a 26.8 per cent growth over the N1.12 trillion recorded during the corresponding period in 2013.
Similarly, the group’s total liabilities consisting of its deposit base and other accruals rose to N1.29 trillion during the period under review as against N995 billion during the same period in 2013. This shows an increase of 29.4 per cent.
According to the bank’s approved 2014 full year financial statements submitted to the Nigerian Stock Exchange (NSE), it grew its loans and advances portfolio by 18.4 per cent, from N549.9 billion in the previous year to N651.3 billion in the year under review.
The International Financial Reporting Standards (IFRS) compliant financial results also show an increase in total equity to N132.3 billion in 2013 as against N121.4 billion in the preceding year, representing a growth of 8.9 per cent.
Significantly, retained earnings grew by 71.1 per cent; rising to N33.7 billion from N19.7 billion recorded in 2013, which management said reflects the group’s pursuit of growth in a stable, strategic and an enduring manner.
In view of certain developments during the year, including elevated impairment charges, regulatory payments, and higher operating cost, its profit before tax for the year declined from N19.6 billion to N10.5 billion during the review period, a 46.43 per cent decline. Also, its profit after tax declined to N9.7 billion as against N18.5 billion reported in 2013, a 51.35 per cent fall.
Speaking on the result, the bank’s Group Managing Director/Chief Executive Officer, Mr. Timothy Oguntayo, said that in spite of the challenging operating environment, the bank carefully grew its risk assets portfolio, attained a 15.7 per cent growth in deposits, supported customers in critical and productive sectors of the economy, and declared a fairly decent profit.
Oguntayo said that the recent acquisition of Mainstreet Bank Limited, which has resulted into a much larger franchise of over 450 branches, provides the bank with enhanced capacity to provide easier access to its teeming customers, and explore various opportunities in diverse segments of the Nigerian economy.
He assured shareholders and other stakeholders that the synergies and economies of scale expected from the acquisition will begin to manifest from the current financial year, while promising current and potential customers of consistent quality service on all electronic platforms and in the business locations.
But after the initial challenges and draw backs, Skye Bank Plc bounced back to improved profitability. It announced a profit before tax of N6.2 billion for the first quarter ended March 31, 2015, representing a leap of 82 per cent over the N3.4 billion recorded during the same period in 2014.
Similarly, the bank’s profit after tax grew to N5 billion during the review period compared to N2.7 billion achieved during the corresponding period in 2014, showing a rise of 85 per cent.
According to the unaudited result submitted on the floor of the Nigeria Stock Exchange, the bank also recorded strong growth in all the performance indicators.
Reflecting the bank’s inclination towards fee based transactions, its fee and commission income which was N6.2 billion in the first quarter of 2014, increased to N10.2 billion in the first quarter of 2015, representing a growth of 64.5 per cent.
The expanded business activities of the bank also manifested in a big rise in its gross earnings which rose to N42.3 billion under the period under review in 2015 from N34.3 billion in the corresponding period of 2014, appreciating by 23 per cent. The shareholders’ fund also rose to N137.3 billion from N132 billion.
The IFRS compliant result also shows the bank’s total assets hitting N1.43 billion from N1.42 billion of 2014 year end. Similarly, its total liabilities, including total deposits, stood at N1.3 trillion as against N1.2 trillion of December 2014.
Commenting on the first quarter financial result, Skye Bank’s Group Managing Director/Chief Executive Officer, Mr. Timothy Oguntayo, said the bank is set to deliver superior value and returns to its shareholders as it enters her new strategic growth phase.
Oguntayo said the bank would leverage the acquisition of Mainstreet Bank to take its services closer to its customers – current and prospective – and expand its bouquet of value adding offerings to meet the diverse needs of its stakeholders.

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