• Thursday, February 22, 2024
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Skye Bank’s earnings resilient as profit up 52 percent


Skye Bank Nigeria Plc has proven resilient to tight money policies by the Central Bank if Nigeria (CBN) as the lender recorded the most impressive results among its peers given its 52 percent rise in profit

For the first six months through June 2015, Skye Bank’s net income was N8.79 billion compared with N5.78 billion in the same period of the corresponding year (H1) 2014.

Earnings per share spiked to 62k in 2015 as against 44k last year.

Analysts say the bank’s howling success is coming amid the high interest rate environment and multiplicity of regulations by the regulator.

These regulations have been hurting profits of  lenders in Africa’s largest economy Nigeria.

The Abuja Based Bank has held on to the interest rate at 13 percent from 12 percent previously held as it seeks to control inflation and stabilize the naira against depleting reserves.

Despite the aforementioned tough operating environment, Skye Bank’s interest income increased by 31 percent to N67.27 billion in June 2015 as against N51.26 billion the preceding year.

Net interest income moved by 16.01 percent to N35.45 billion despite as 53.5 percent drop in interest expense.

The decision of the regulator to increase the cash reserve ratio however weighed on Skye Bank’s deposit base as deposits to customers were down by 12 percent to N837.68 billion in the period under review as against N952.30 billion last year.

Analysts say the implication of the new rule apart from reducing liquidity in the system is that it will also make investor lose appetite for the country’s stocks.

Skye Bank’s loans  and advances to customers jumped by a mere 1 percent to N657.16 billion June 2015 compared with N651.26 billion last year.

Its loans to deposits ratio increased to 78.44 percent in the review period from 68.90 percent last year.

Total assets were down by 9.85 percent to N1.28 trillion as against N1.42 billion in 2014.

Skye bank maintained a satisfactory efficiency level as cost to income ratio reduced to 70.02 percent in 2015 from 71.05 percent last year while operating expenses were up 21.10 percent to N37.40 billion in 2015 as against N30.88 billion in 2014.

The bank’s share price closed at N2.02 on the floor of the exchange while market capitalization was N28.59 billion.