By Babajide Komolafe

The financial performance of Skye Bank for the operating year ended December 31st 2011 further attest to the efficacy of focus as catalyst for improved performance.

During the year, the Bank, in spite of the pressures to do otherwise, chose to focus on its core business areas and upgrade its facilities to enhance service delivery.  This decision coupled with the strong fundamentals carried over from the 2010 operating year, helped the bank to attract more business patronage in terms of deposit takings and lending to businesses and individuals. This occasioned growth in asset base and improved earnings.

2011 Financial Result
According to the 2011 audited financial result of the Skye Bank Group total asset grew by 31.3 per cent to N927.1 billion, from N705.9 billion recorded in 2010 financial year.

Reflecting increased public confidence, the bank’s deposit base grew by 22.5 per cent to N658.1 billion during the year from N507.6 billion in the previous year.. This propelled the Group’s operating income to grow by 22.5 per cent from N60.8 billion in 2010 to N74.4 billion.

The Bank also recorded 24.8 per cent   growth in gross earnings (from N83.9 billion to N104.8 billion), representing growth in interest income and fee commission income.  Similarly, other major growth areas included oil and gas commercial banking, retail banking, treasury, corporate and investment banking.

This growth trajectory reflected in a 29.6 per cent  increase in deposit volumes in the year, from N507.6 billion to N658.1 billion, and a 22.3 per cent growth in gross loans and advances from N424.8 billion to N519.7 billion.

This increased business patronage was however not reflected in its profitability as profit before tax dropped by  48.9 per cent  from N12.7 billion to N6.5 billion due to additional provisions of N15.9 billion for diminution in assets value.
Group Managing Director/Chief Executive Officer, Skye Bank, Mr. Kehinde Durosinmi-Etti, attributed the improved performance of the bank to power of focus.

He said the Bank maintained its focus on certain business segments in which it has had good track records, in addition to new segments where it exploited business opportunities. He said that  the pattern of reduction of the non-performing loan (NPL) ratio remained consistent in 2011, as the ratio dropped significantly to 4.9 per cent, from 11.9 per cent reported last year’.

“In pursuit of efficiency, we focused on reinforcing our branch network by upgrading facilities, deepening deployment of products and services, and ensuring optimal human resource input for improved customer service.

“We reaped good returns from the deepening of our treasury activities, which resulted in 545.9% and 274.2% growth in foreign exchange income and investment income, from N1.2 billion and N1.4 billion in 2010 to N7.8 billion and N5.1 billion respectively”, he said.

Durosinmi-Etti said the bank in the 2012 operating year will conclude the process of divestment from non-core banking subsidiaries, as approved by the  Board of Directors and regulators, during the second quarter of 2012. “This will enable us focus on our main intermediation role in Nigeria and in our three foreign banking subsidiaries”.

He added  that the bank would grow its business in existing segments, while seeking to expand into new markets and deploy new products and services.

He revealed that the bank would in the new financial year, affirm its focus on diversifying its  income streams toward non-interest income, in anticipation of interest rate and inflationary pressures, largely from the external environment in addition to re-invigorating its cost management and efficiency apparatus toward attaining optimal returns.

On the the ‘Cashless/Cash-lite’ policy, the Skye Bank boss said it would provide a major vista for the Bank in 2012 and beyond, considering its well regarded footprints in technology-based infrastructure over the years.

Durosinmi-Etti, GMD, Skye Bank

2012 Q1 Performance
The Bank’s financial results in the first quarter of 2012 show that the Bank is not only consolidating on the gains of 2011, it is also leveraging on it to deliver better results for the whole year. The Bank  recorded a total gross earnings of N27.8 billion during the first quarter ended March 31, 2012. The performance shows an increase of 12.6 per cent over the N24.7 billion grossed during the corresponding period in 2011.

Similarly, the group’s total assets during the review period grew moderately to N996.7 billion from N939 recorded in 2011.

Other positive growth indices include the deposit portfolio which rose from N651.3 at the end of the first quarter in March 2011 to N725 billion at the end of March 2012.

The group’s profit before tax was also impressive, falling marginally to N4.08 billion as against N4.2 recorded during the same period in 2011.

Also, the group’s IFRS compliant result sent to the floor of the Nigerian Stock Exchange showed that its loan portfolio increased from N518 billion in 2011 to N520 billion during the review period. The Net Interest Income after loan impairment charges grew by 18.1% to N12.4 billion as against N10.4 billion recorded in the previous year.

Dividend reward for shareholders
At the annual  general meeting of the bank held last month, the N3.3 billion dividend proposed by the Board was approved by shareholders This translates to 25 kobo  dividend per share for the period ended December 31, 2012.

Chairman of the Skye Bank, Mr. Olatunde Ayeni,  said the dividend payout was in furtherance of the bank’s  commitment to deliver optimal returns to  shareholders.

He said that in arriving at the dividend sum, the board also took into account the need to have reasonable reserves to maintain the going concern status of the bank.

In his address at the AGM,  Kehinde Durosinmi-Etti, promised that the bank would continue to do all within its power to enhance shareholders’ value and returns on investment. He said the bank has been positioned for leadership role in the nation’s banking industry and has been strengthened by capital injection and good corporate governance policy.

Some of the shareholder commended the management of the bank for the improved performance despite the tough operating environment.