Skye Bank Incurs N40bn Loss on N35bn Impairment Charges

Skye Bank

As part of efforts to reposition the bank and record better future performance, Skye Bank Plc has made a total provision of N34.681 billion for impairment charges for the year ended December 31, 2015. Although the bank ended the year with higher interest income of N127 billion in 2015, up from N107 billion in 2014, the impairment charges made the bank to record a loss of N40.726 billion compared with a profit of N18.717 billion in 2014.

While N27.53 billion impairment charges were for loans, N7.145 billion was provided for as impairment charges for other financial assets.

The bank’s huge exposure to the oil gas, energy and other sectors of the economy affected its loan performance, a development that made the Central Bank of Nigeria (CBN) to intervene in the bank last month.

The new Group Managing Director of Skye Bank, Mr. Tokunboh Abiru had assured capital market operators that the management team and the board would work to achieve value enhancement for shareholders, customers and other stakeholders by bringing the cost-income ratio to acceptable levels, improve the risk assets quality and work towards increasing the liquidity and capital adequacy of the bank.

Abiru described the reconstitution of the bank’s board as an intervention, saying the lender’s fundamentals are good and strong.

Also, the Chairman of Skye Bank Plc, Mr. M.K. Ahmad had explained that the CBN did not take over the bank but only intervened to correct observed corporate governance issues under the old board.
According to him, the ownership of the bank remains in the hands of the shareholders, stressing that the CBN does not own the bank and has not taken over the bank, saying the CBN was fully behind the bank and would support it to fully stabilise.

Ahmad, a former Director General of the National Pension Commission, re-assured the bank’s stakeholders that the bank was not distressed but only had corporate governance issues under the old board. He said the bank’s fundamentals remain strong and that it remains one of Nigeria’s leading and retail banks.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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