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Skye Bank posts N127.7 billion profit for 2012

By on May 21, 2013

…plans to invest over $100m million in power sector

Skye bank Plc has achieved gross earnings of N127.7 billion in 2012 operations, against N102.4 billion posted in 2011.

Besides, the bank announced plans to inject over $100 million into the power sector in the current financial year, while 17 per cent of its loan portfolio is expected to be injected in the upstream oil sector

The bank’s profit after tax also rose to N12.6 billion, from N1.3 billion in 2011.

Addressing Journalists at the bank’s pre-AGM briefing in Lagos yesterday, the Group Managing Director of the bank, Mr. Kehinde Durosinmi-Etti, explained that the Non -Performing Loans (NPL) of the bank was still under five per cent which is in accordance to the Central Bank of Nigeria (CBN) guideline, even as the figure stands at 4.9 per cent from 3.1 per cent of 2011.

He added that the bank recorded N28.1 billion in non-performing loans in 2012 from N16 billion in the previous year.

On the basis of the impressive bottom-line, the board of the bank recommended an increase in dividend per share from 25 kobo paid for 2011 business year to 50 kobo for 2012.

The bank chief who noted that the consolidation exercise in the banking industry has strengthened banks’ ability to fund the oil and gas sector, disclosed that the bank has concluded arrangements to raise N50 billion tier one capital.

He added that the fund raising for banks was a continuous process which would enhance its bottomline for long- term growth.

He said, “We will be raising Tier 2 capital before the end of the third quarter, and we also plan to raise some Tier 1 capital too. This is important because as a banks, we need to keep raising capital.

“We will probably be asking for up to N50bn, but that will depend on what our advisers say after they have looked into our books and our plans, they will be able to advise us appropriately.

According to him, the bank earned N15.324 billion from electronic payment during the year under review, adding that this contributed to 12 per cent of the bank’s 2012 gross earning.

He said the decision of CBN to remove Automatic Teller Machine (ATM) from off-site impacted on the performance of the bank.

“We lost over 50 per cent of our ATM machines during the reform, because we have been focusing on off-site, most of our machines were mounted off-site. We were having 800 machines off-site but with the new rule of mounting it on-site it reduced to 500 machines.

“He said removal of ATM charges and phasing out of COT by 2015 would also impact on the profitability of banks in Nigeria.

“With this, we have been looking at way of expanding our business so that it will not affect our profit line”.

He explained that since banks do not want to lose money, they would rather lend to oil exploratory companies after reserves have been confirmed.

He added that the banks in the country are more favorably disposed to lending to oil producing companies at the point when oil reserves have been confirmed.

 

( guardian)