Skye Bank’s submitted full-year 2014 results to the Nigerian Stock Exchange (NSE) show a significant appropriation to retained earnings, demonstrating the bank’s ambition to play and dominate the tier 1 retail banking space.
Retained earning, which is an indicator of a company’s plans for growth in the future, was grown 70.6 percent from N19.73 billion in the 2013 financial year to N33.7 billion in 2014. The numbers helped swell the bank’s total equity level to N132.26 billion from N121.4 billion, a 9 percent rise.
The IFRS compliant results show operating income was up marginally to N69.33 billion from N68.5 billion, indicating increasing efficiency in cost management. This was on the back of a 2.4 percent rise in interest income from N105.3 billion to N107.85 billion.
Interest income is an indicator that helps explain how well a bank is doing in its maturity transformation quest.
The bank’s headline and bottom-line profits in the period under review were tempered by impairment charges, regulatory payments and higher operating cost, including cost of acquisition Mainstreet Bank among other costs. These muscled-down pre-tax profit 46.7 percent from N19.65 billion to N9.74 billion.
The bank has over the last year grown assets 27 percent from N1.12 trillion to N1.42 trillion, helping to provide a stronger cover for deposit liabilities. The metric improved to 1.5 from 1.3. This is as the bank has grown deposits 15.7 percent to N952.3 billion from N823.3 billion.
A robust deposit base is an indication of a bank’s strong marketing ability, especially in the area of attracting and mobilising deposits.
The group’s liabilities consisting of deposit base and other accruals rose to N1.29 trillion during the period compared with N995 billion achieved a year ago.
Speaking on the results, Timothy Oguntayo, the bank’s group managing director/CEO, said in spite of the challenging operating environment, the bank carefully grew its risk assets portfolio, attained a 15.7 percent growth in deposits, supported customers in critical and productive sectors, and declared a fairly decent profit.
The recent acquisition of Maintreet Bank, 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, Oguntayo said.
The results have some good news for investors who have watched their investment grow in the last financial year, making it one of the fastest growing banking stock on the NSE.
He assured those who kept their investment with the bank, along with other stakeholders that the synergies and economies of scale expected from the Mainstreet 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.
It would be recalled that Sky Bank recently acquired Mainstreet Bank for N126 billion in a deal promising to vault the bank into a tier-one bank.
