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Shareholders commend Skye Bank Board over 5k dividend

By Peter Egwuatu
Shareholders and   investment analysts have commended Skye Bank Plc for the five kobo dividend being proposed by the Board of Directors of Skye Bank Plc for the financial year ended December 31, 2009.

The shareholders declared that given the harsh operating environment and the ongoing reforms in the banking sector the bank has done well in putting smiles on them even though that the dividend is very small.

To this development, some of the shareholders expressed their appreciation to the management of the Bank for proposing a dividend of 5kobo per share, in spite of the enormous challenges faced by the banking industry in the course of the year. They also hold the firm conviction that the results of the 2010 financial year would be remarkably better in view of the track record of the Bank and its huge potentials.

Stockbrokers also joined in commending the Bank for its performance during the period under review, noting that Skye Bank would likely benefit from the reduction in interest rates, which would lead to significant decrease in its cost profile, and therefore increase its earning potential in the new financial year. They also alluded to the fact that the Bank would present stronger results in the coming months, considering its very strong and significant showing in ‘traditional’ businesses such as structured financing in power, oil and gas, construction, hospitality, education, and transport sectors.

They also believe that its Non_Performing Loan (NPL) ratio would significantly reduce, considering that adequate provisions had been made for transactions in those lines of businesses in the 2009 financial statements, as advised by the regulator.

They opined that, since the current government has made the tackling of Nigeria’s infrastructural financing as its main goal, the Bank would be in a better position to explore the various opportunities available from such a focused public policy direction.

They also stated that the Bank’s recent business wins 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 is an indication of stakeholder confidence. The Bank won this mandate on the backdrop of having won the Maritime Bank award in 2007.

Specifically, Skye Bank recorded gross earnings of N126.67billion for the year ended December 31, 2009 as against N74.62 billion achieved in 2008. The result represents a remarkable growth of 69.76 per cent.

In its audited results released yesterday on the floor of the Nigeria Stock Exchange (NSE), the bank’s 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.

Despite the inclement operating environment, and the significant challenges faced by the Banking industry during the year, it declared a profit before tax of N2.15billion, and profit after tax of N1.13billion, respectively.

During the financial year also, its loan portfolio recorded a 28.97% increase, from N246.39billion to N317.76billion. This increase evidently reflects a high level of organizational focus, sound management, and consumer confidence in the Skye brand, considering the pervasive hiccups in the industry in the area of risk asset creation.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.