Investors accumulate Skye Bank’s stocks

Traders and investors on the Nigerian Stock Exchange (NSE) are beginning to accumulate Skye Bank stocks after the healthy results posted by the bank in the first quarter of 2015, data from the NSE reveal.

Upon release of the results last Thursday, investors rewarded the bank by helping to shore up the its stock price to N2.70 at the close of trading on the NSE. It was a clear 10 kobo appreciation over the previous day when the stock traded at N2.60.

The rise on Thursday represents a 46 percent rise in the bank’s stock price since early February, a sign that the investing public is taking note of the bank’s strategic actions.

Skye Bank was the biggest gainer in the banking sector last week, with 229 percent in gains from between May 18 – 22, 2015. Wema Bank followed closely with gains of 155.7 percent.

On Wednesday, May 20, 2015, for the first time since last February, the bank had the largest market trading share with 30 percent of the market volume with 56.7 million shares sold, followed by UBA with 21 percent and Access Bank with 13 percent, signalling that investors are accumulating the bank’s stocks.

The bank continued the market dominance with 26 percent of the total market share the day after, Thursday, May 21, Fidelity Bank followed with 19 percent market share and ETI had 11 percent of the market share.

Much of the interest in the bank’s stocks is generated from the good 2015 first quarter results, announced last Thursday. The bank announced a sharp rise in gross earnings to N42.3 billion from N34.3 billion in 2014, appreciating by 23 percent.

It announced pretax profits of N6.2 billion, representing an increase of 82 percent over the N3.4 billion recorded during the same period in 2014.

The bank’s bottom-line followed the growth trajectory as net profit or profit after tax sprang up to N5 billion during the review period compared with N2.7 billion achieved during the corresponding period in 2014, an 85 percent rise.

In marginal terms, pretax profit margin for the period rose to 14.7 percent from less than 10 percent in the corresponding quarter. In percentage terms, this is over 49 percentage points from the equivalent quarter. What this means is that where the bank used to translate every N100 put in the business to N9.9, in the quarter under review, it made N14.7.

The result is a strong indication of a more efficient bank that promises to consolidate on the gains.

The rapid improvement in the fee-based transaction of the bank is evident of the bank’s strategy of leveraging the fee and commission income opportunities in the Nigerian marketplace. Fees and commissions vaulted to a whopping N10.2 billion from the previous level, which was N6.2 billion in the corresponding period in 2014, a 64.5 percent improvement. Fees and commissions are complementary to the bank’s interest earning assets.

“In the remainder of 2015, we will complete the integration of Mainstreet Bank Limited, and consolidate on our market penetration strategies in the retail and commercial segments,” says Timothy Oguntayo, the bank’s group managing director/CEO.

“Our tier 1 capital raising project remains on course, having achieved substantial milestones. We intend to complete the project during the third quarter.

“Consolidating our performance in the first quarter, we will intensify our drive for low-cost deposits, enhance internal efficiencies, while remaining confident that our performance in the remaining nine months of 2015 would meet expectations of our various stakeholders,” he says.

 

BALA AUGIE