By Alex C
Skye Bank plc recorded a total asset of N1.131 trillion, second quarter ended June 30, 2014, representing a marginal growth of 1.3 percent compared with N1.116 trillion it reported during the corresponding period in 2013.
The bank’s total liabilities including deposits grew to N1.016 trillion during the review period from N996.221 billion the previous year, an increase of 1.9 percent.
In the International Financial Reporting Standards (IFRS) compliant result submitted at the Nigerian Stock Exchange, the bank attributed the growth in its total assets to its various business
development activities in diverse sectors of the economy.
The bank said its profit before tax dropped to N7.266 billion as against N10.545 billion during the corresponding period in 2013. Profit after tax also decreased to N5.786 billion as against N8.428 billion the previous year.
Explaining the reasons for the decline in its profit, the bank attributed the development to its aggressive approach to loan provisioning in the earlier part of the year (an increase of 100% to N5.010bn from N2.511bn in June 2013), with a view to streamlining provisioning on a quarter by quarter basis for easier comparison, as well as marginal increase in operating expense of N30.882 billion compared with N30.877 billion in 2013.
“Our half year 2014 results showed moderate improvement in the various performance indices. The cautious growth of our business lines coupled with a continuous improvement in our operational processes and enhanced efficiency are signposts to a promising end to the financial year.
With gross earnings of N63.9 billion, we reduced our interest expense by 24 percent year-on-year to close at N20.7 billion compared to N27.2 billion as of June 2013, in line with our operational strategy of increasing the volume of low cost funds in our deposit portfolio.
“Our loan impairment charge increased by 100 percent year-on-year to N5.0 billion; being a deliberate policy of aggressive provisioning early in the year to enable a fairly sustained position and avoid high-figure concentration in the last quarter. Exchange earnings improved by 5 percent to N5.8 billion compared to N5.5 billion of the corresponding period in 2013.
“The deliberate focus on cost reduction organisation-wide also paid off with a flat growth in operating expenses which closed at N30.8billion (N30.9bn in June 2013), and resulted into a profit before tax of N7.3 billion.
“Asset size remained strong at N1.1 trillion with a 5 percent year-to-date loan growth (at N578.9bn), while our deposit volume reduced marginally by 0.6 percent YoY to N818.4 billion, reflecting our strategy of substituting term deposits with demand deposits and savings,” according to the bank.