Skye Bank grosses N102bn in Q3

By BLAISE UDUNZE
Skye Bank Plc leveraged its increasingly efficient cost management and stable market share to optimize profitability in the third quarter of 2013 as gross earnings rose to N102 billion in the nine-month period, from N94 billion in the corresponding period of 2012.
The bank’s net interest margin increased by 12 percentage points from 47 percent to about 59 percent underlying the success of its focus on core commercial banking operations and investments in services delivery.
Interim earnings report for the third quarter ended September 30, 2013, which was prepared in compliance with the International Financial Reporting Standards (IFRS), showed that the bank sustained steady growth in top-line earnings and made impressive growth in core banking profitability although its net bottom-line was constrained by regulatory costs.
The nine-month report showed that while interest income grew by 13.5 percent, net interest income rose by 42.04 percent, with net interest margin, which measures the profitability of the core banking operations, increasing from 47.08 percent in third quarter 2012 to 58.88 percent in third quarter 2013. The strong core profitability muted the adverse impact of industry-wide cost headwinds on the net bottom-line of the bank. The bank noted that various regulatory policies and tightened liquidity including the introduction of 50 percent Cash Reserve Ratio (CRR) on public sector deposits and generally put pressure on profitability margins of banks.
The group results showed that gross earnings increased to N102.04 billion in 2013 as against N94.13 billion in comparable period of 2012 as interest income increased from N76.41 billion to N86.76 billion. Similarly, net interest income rose from N35.97 billion to N51.09 billion, while Group operating profit also rose by 21.6 per cent from N50.79 billion to N61.74 billion.
Commenting on the results, Group Managing Director/Chief Executive Officer, Mr. Kehinde Durosinmi-Etti, said the results have demonstrated the capacity of the bank to sustain continuous improvement in major performance indices.
According to him, the moderate growth was commendable in the context of the several regulatory policies and tightened liquidity which has constrained profitability margins across the industry.