Skye Bank to boost return on equity

With agency report

Skye Bank said on Thursday it will boost return on equity (ROE) to around 15 percent by the year-end from 4.7 percent in 2011 and grow its loan book by 30 percent.

It achieved a 22 percent growth in loans in 2011 to 519.7 billion naira ($3.31 billion) by targeting oil and gas, construction, public sector and general commerce, the bank said in an investor briefing on its 2011 full year results.

But its pre-tax profit fell 45.5 percent to 6.51 billion naira in 2011. Skye did not provide an explanation for the fall in the presentation.

The mid-tier lender has 249 offices in Nigeria and three bank subsidiaries in West Africa – Gambia, Guinea and Sierra Leone. It said its 3-5 year plan was to grow loans by around 40 percent with ROE reaching 20 percent.

Lending to Africa’s second biggest economy had started to recover after a banking crisis that led to a $4 billion bailout of nine bankrupt lenders in 2009. Skye wasn’t among them.

Syke’s rivals – First Bank, United Bank for Africa (UBA) — have also announced loan growth of around 10 percent or more for 2012

The bank also said that it has raised $15.5 billion ($100 million) in debt from a multilateral institution at a floating coupon rate of 6.3 percent for seven-years to boost its capital, its chief executive Kehinde Durosinmi-Etti said on Thursday.

“It will add about two percent to our capital adequacy ratio,” he said, during an investor briefing, commenting on its currently capital adequacy level of 17.5 percent.

A number of Nigerian banks — First Bank, United Bank for Africa (UBA) and Diamond Bank have indicated interest to raise bonds from the international market this year.


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