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Skye Bank forewarns investors on declining profit

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Skye Bank forewarns investors on declining profit

In what was a major disappointment and turnaround from the boisterous blitz on its third quarter earnings, the management of Skye Bank has now admitted that the bank has suffered significant decline in profit and its earnings would fall short of the previous year’s targets.

A profit warning filed at the Nigerian Stock Exchange (NSE) indicated a conclusive position, based on the management accounts and audits, that the bank would witness steep decline in its profitability in the immediate past business year ended December 31, 2015.

According to the management of the bank, there would be “material decline in its profits for the full year ended December 31, 2015 compared with that of 2014”.

The bank blamed the expected decline on 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.

The bank however assured that while it has taken the impairments, it has designed and commenced appropriate remedial processes to salvage the affected loans as soon as possible.

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

Read also: Skye Bank searches for new funds to beef up capital base

The nine-month financial statement of Skye Bank Plc for the period ended September 30, 2015 showed 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.

The group managing director of the bank, Mr. Timothy Oguntayo, had then assured that the bank would sustain the upward growth pattern through the last quarter of the year.

He had assured that 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.

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.

 

 

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