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CBN takes over Skye Bank, sacks directors, management



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The Central Bank of Nigeria (CBN) on Monday perfected the take over of the management of Skye Bank Plc, in a cursory and ironic blow reminiscent of the takeover of the former Afribank Nigeria Plc, which the apex bank took over and renamed Mainstreet Bank Limited. Skye Bank later bought Mainstreet Bank Limited.

While details of the takeover are still sketchy, authoritative sources at the CBN and Skye Bank have confirmed the takeover. Meetings are currently ongoing at the Victoria Island, Lagos head office of Skye Bank.

It would be recalled that Skye Bank had alerted that it recorded significant decline in its profitability in the immediate past business year as impairments from doubtful and bad debts weighed down the bottom-line of the commercial bank.

In a profit warning filed at the Nigerian Stock Exchange (NSE), the management of the bank alerted the investing public that there could be “material decline in its profits for the full year ended December 31, 2015 compared with that of 2014”.

The management of the bank attributed the expected decline to its decision to recognize increased impairment on loans to sectors severely affected by the prevailing economic headwinds which are yet to abate, especially the lull in oil and gas and real estate sectors.

“While this cautious approach has been adopted, we have designed and commenced appropriate remedial processes to salvage the affected assets as soon as possible,” Skye Bank stated.

The management of the bank reiterated its commitment to focusing on supporting the growth of the retail and small and medium enterprises (SME) sectors amongst others.

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The bank noted that in 2015, it made substantial improvements to its risk management framework with a view to ensuring that its risk assets portfolio remain solid and of good quality, assuring that its cost containment, internal efficiency and process improvement measures remain on track.

The full details of the bank’s financial statement are expected to be released after regulatory approvals.

Skye Bank’s share price rose by 3.0 kobo to close yesterday at the NSE at 99 kobo. It however remains one of the worst-performing stocks at the stock market. It would be recalled that Skye Bank acquired erstwhile Mainstreet Bank Limited in December 2014, and concluded the integration of both banks in June 2015.

The profit warning undercut the enthusiasm of the investing public after the bank reported strong growth in the third quarter and assured on the prospects for the fourth quarter. Earnings report and accounts of the bank for the nine-month period ended September 30, 2015 had shown that gross earnings rose by 33.1 per cent to N129.24 billion in third quarter 2015 as against N97.13 billion recorded in comparable period of 2014. Interest income had grown by 25 per cent from N79.51 billion to N99.50 billion while non-interest income rose sharply by 69 per cent from N17.62 billion to N29.74 billion.

Profit before tax rose by 21.5 per cent from N12.33 billion to N14.98 billion while profit after tax also rose correspondingly by 21.5 per cent from N9.87 billion to N11.98 billion. Earnings per share for the nine-month period stood at 86 kobo in 2015 as against 75 kobo recorded in comparable period of 2014.

Group Managing Director, Skye Bank Plc, Mr. Timothy Oguntayo, had assured that the bank would sustain the upward growth pattern through the last quarter of the year, assuring that the bank has steadied on a positive growth trajectory.

According to him, having successfully executed one of the biggest acquisitions in the nation’s banking industry, the bank was poised to deliver superior value and returns to its various stakeholders.

He had pointed out that Skye Bank is currently the fourth largest bank in Nigeria in terms of branch network and it has embarked on several game-changing initiatives that will bring about a new world of possibilities for its customers, being the first company in Nigeria to launch a ‘Customer Service Charter’; and also launched a women-focused ‘Skye Pearl Initiative’ last week.

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