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Tag: SKYE BANK

  • Skye Bank, Marine Platforms partner

    Skye Bank, Marine Platforms partner

    Skye Bank Plc has increased the capability of one of its corporate customers, Marine Platforms Limited, by funding the acquisition of a multi-purpose support marine vessel that provides offshore support services to the Oil & Gas companies.

    Marine Platforms Limited is a frontline and the biggest indigenous service provider in the upstream sector of the oil and gas industry, providing wellbore clean out, subsea solutions and vessel chartering services in Nigeria and across the continent.

    Speaking at the unveiling and Vessel tour at the weekend, Group Managing Director/Chief Executive Officer of Skye Bank Plc. Mr. Timothy Oguntayo, said the bank was happy to support indigenous participation and local content in the nation’s oil and gas sector, particularly the upstream end.

    He promised the bank’s continued partnership with and assistance to the company to enable it fulfill its vision and corporate objective of being an industry leader in the provision of support services to the oil & gas companies.

    The bank CEO said the lender would also avail the company of effective financial and other advisory services that will give it a competitive edge in the industry due to the technical and complex nature of the industry.

    The Chief Executive Officer of Marine Platforms, Mr. Taofiq Adegbite, commended the bank for believing in the management by supporting their dream from inception, a factor he said has helped them to realize the company’s goals and dreams.

    “Skye Bank has been helpful from day one; they have provided us with the financial muscle needed to succeed in our line of business”, stressing that the company would continue to be proactive to stay relevant.

  • Skye Bank, COPE Foundation tackle cancer

    As the global community commemorates this year’s World Cancer Day, Skye Bank Plc has demonstrated its commitment to public health and safety by promoting a public awareness campaign about the disease.

    The bank, in collaboration with a non governmental organisation, COPE Foundation, focused on the menace of breast cancer and embarked on a sensitisation campaign to get women come out for free breast cancer courtesy of both Skye Bank and Cope Foundation.

    Stakeholders insist that the public can learn more about the causes of cancer, its prevention, control and treatment through the sensitization exercise.

    The World Health Organisation (WHO) said about 70 per cent of all cancer deaths occur in low- and middle-income countries. Deaths from cancer worldwide are projected to continue to rise to over 13.1 million in 2030. Cancer is a leading cause of death worldwide, accounting for 7.6 million deaths, around 13 per cent of all deaths in 2008.

    Skye Bank’s Group Managing Director/Chief Executive Officer, Mr. Timothy Oguntayo, described cancer as one of the leading causes of death world wide, especially in the developing countries where inadequate medical care and lack of awareness about the disease have combined to make it very deadly.

    He called on government and private sector operators to collaborate to fight the scourge of cancer in the society as incidence of the disease is on the increase.

    “At Skye Bank, we have taken up the challenge of working in concert with other publicly spirited organisations and philanthropists not only to promote awareness about the scourge but also to facilitate screening, early detection and effective care for those afflicted. Our concern and desire to stem the growing incidence of the scourge date back to several years ago when we partnered with some non-governmental organisations (NGOs) to call attention to the threat posed by the disease,” he said.

    Continuing, the bank CEO said: “It was in furtherance of our commitment towards contributing to the fight against the high incidence of cancer, especially breast cancer in the country that we partnered with an NGO known as Care, Organisation and Public Enligthenment (COPE) Foundation, under our Corporate Social Responsibility (CSR) initiatives, by donating two breast cancer screening machines to it to facilitate screening and early detection of the disease”.

    The Skye Bank boss pledged that the lender would continue to support worthy social causes in the health sector to improve the wellbeing and healthcare of Nigerians, saying a healthy nation is a wealthy nation.

    Oguntayo called on other corporate organisations to join in the fight against cancer by supporting various programmes and initiatives by NGOs and the government to reduce the cancer scourge and mortality rate in our society.

    The Managing Partner of COPE Foundation, Mrs. Ebun Anozie, called for the establishment of cancer care centres in the country where specialists would be available to provide care and treatment to patients and survivors.

    She commended Skye Bank for sponsoring over 30 indigent cancer  patients for treatment in addition to providing free screening programmes for over 10,000 women within and outside Lagos.

    Anozie said the 2015 World cancer day’s theme is “not beyond us”, focusing on choosing healthy lives; delivering early detection; achieving treatment for all and maximizing quality of life.

    For her, focusing on these issues would improve the quality of life and stem incidence of cancer disease.

    “Unfortunately, we have noticed the prevalence of breast cancer in younger women and late presentation is still on the increase. Women should please avail themselves of the opportunity to free screening because early detection and treatment is safer and cheaper,” she said.

    Cancer experts affirm that death arising from cancer can be avoided in low- and middle income countries if action is taken, bearing in mind that we have well over 100 types of cancer worldwide.

    The COPE Foundation chair person thanked Skye Bank for taking up the challenge to support COPE in spearheading the fight against cancer. According to her, the lender has made available free breast and cervical cancer screening to over 300 women during the World Cancer Day week and many more thereafter through the provision of a multi-million naira mobile and stationary cancer screening equipment.

    Skye Bank acquired two cancer screening machines for COPE to help in early detection of the disease as well as facilitating effective treatment when diagnosed of the disease.

  • Skye Bank highlights benefits of Mainstreet Bank acquisition

    Skye Bank highlights benefits of Mainstreet Bank acquisition

    The acquisition of Mainstreet Bank Limited and the attendant synergies between the two institutions had given Skye Bank the competitive edge, which it would leverage to deliver quality customer service and high returns to shareholders.

    Group managing director, Skye Bank Plc, Mr. Timothy Oguntayo, disclosed this at the weekend at a forum with stockbrokers in Lagos.

    He said the acquisition has provided the bank the opportunity to optimize cost, assuring that the bank would leverage its superior information technology to block leakage as well as pursuing aggressive expense control.

    According to him, as the bank assumes the status of a mega bank following the acquisition, it will place strong emphasis and focus on retail and commercial banking as a way of bringing about a healthy deposit mix to bring down its cost of funding.

    He highlighted that the new business strategy will also allow the bank to reduce the volume of public sector deposit and term deposit at its disposal for enhanced profitability and business sustainability.

    He outlined that the bank would continue to upgrade its information technology continually, while also promoting the usage of point of sales terminals and automatic teller machines to serve its teeming customers.

    Assuring of seamless integration, Oguntayo said the bank has put in place measures to grow its balance sheet as well as create value for its shareholders.

    Similarly, the bank’s branch network is now 450 compared to 260 branches before the business combination with Mainstreet Bank.

    Oguntayo  also expalined that the increased branch network would make  access to the bank’s services easier as branches are now  easily accessed. He added that the bank’s combined automatic teller machines network is now 815 from 600 prior to the acquisition.

    Oguntayo said the bank has strongly established its presence in the South South , South East and the North through the acquisition and promised the customers of better days ahead.

    Currently, he said the customer base of the bigger bank stands at five million, while efforts are still on to increase the figure.

    The doyen of the stockbrokers, Mr. Sam Ndata, commended Skye Bank over the acquisition of Mainstreet Bank and for informing the brokers of the developments in the bank. He also lauded the transparency and openness of the bank which he said would help the market to take informed investment decisions.

  • Skye Bank strengthens support roles

    Skye Bank strengthens support roles

    Skye  Bank  has engaged the  services  of  Optimum Continental Services, Strategic Outsourcing Limited  and  Integrated Corporate Services Limited,  to manage its support function staff.

    The lender took the decision as part of its initiatives to position the bank for excellent service and superior performance in the coming years.

    It noted that efficiency and excellent customer service will be key to winning in the market place in the years ahead, acknowledging that  the  support  functions  are  pivotal  to  the  ability  of  the  bank  to  meet  its  growth objectives and be managed by professional human resource companies that have extensive skills and competence in this regard.

    To assure the welfare of the staff that are mostly on the lower cadre, the bank insisted that a non – negotiable condition for taking over the support staff by the human resource companies is that the staff will enjoy the same terms and conditions as they did, when they were employed by their former employer, Skye Bank Resources Ltd.

    The bank said under the new arrangement,  the  affected  officers   consisting  of  drivers,  security  officers, tellers and other support staff, have been absorbed automatically by the new employers on the same terms and conditions they enjoyed prior  to now.

    It  is expected that the management  companies  who  are  industry  leaders  and  experts  in  human  resource management, would enrich the quality of the officers by relevant training, skills transfer and enhanced welfare packages.

  • Skye Bank takes over Mainstreet

    Skye Bank takes over Mainstreet

    Banking has got another giant, with the  Asset Management Corporation of Nigeria (AMCON) at the weekend transferr ownership of Mainstreet Bank to Skye Bank Plc.

    The transfer took place after a completion meeting where AMCON divested its interest and transferred  ownership of the bridge bank to  Skye Bank, which paid 100 per cent of the acquisition value.

    The Nation last week exclusively reported the clearance of the acquisition by the Securities and Exchange Commission (SEC), the apex capital market regulator that has statutory control over mergers and acquisitions.

    At a short handover held at AMCON headquarters in Lagos, at which the directors of Mainstreet Bank and Skye Bank were present, AMCON handed over ownership and praised Skye Bank for emerging the preferred of the over 29 bidders “in the highly competitive and transparent process that took over a year to complete”.

    Skye Bank was lauded “for its tenacity and doggedness in pursuing the acquisition with all sense of seriousness and professionalism”.

    AMCON also praised the out-going Board and Executive Committee members of Mainstreet Bank for “their dedication and service to Nigeria in steering and piloting the affairs from what it used to be, to profitability”.

    Between October 3 and October 31, Skye Bank paid both the initial 20 per cent mandatory deposit and completed the 80 per cent balance well ahead of the November 3 deadline for the 100 per cent acquisition of Mainstreet Bank, which has been described by several analysts and financial commentators as a ground-breaking acquisition.

    While addressing the executive members and management team of Mainstreet Bank at the bank’s headquarters after the handover by AMCON in Marina, Skye Bank Group Managing Director Mr. Timothy Oguntayo, assured the staff and customers of good times ahead. He solicited the co-operation of all in ensuring a seamless transition.

    Analysts have been unanimous in that the acquisition, operationally, is a game-changer for Skye Bank, given possible synergies and the impact on the balance sheet and profitability of the bank. It will also increase the bank’s market position in the industry and at the stock market.

    Analysts predict that the potential impact will be big on Skye Bank’s reach and asset size. Mainstreet Bank has nine subsidiaries and a large distribution network comprising 201 branches across 35 of the 36 states and the Federal Capital Territory, Abuja. It has nine cash centres and 205 Automated Teller Machines (ATMs).

    Skye Bank, with dominant operations in the Southwest, is also banking on Mainstreet Bank to deepen its penetration of the South-East and South-South regions where it is less represented. Some 26 per cent or 54 branches of Mainstreet Bank’s network are located in the two regions. These two regions also account for 28 percent of Mainstreet Bank’s over 1.9 million customers, second only to Lagos with 37 percent.

    With smooth and seamless integration, Skye Bank will make valuable in-roads into these two regions without the need to incur huge expenditure. The acquisition will bring valuable concurrence and synergy from the mutual focus areas of commercial and retail banking of the two entities. Skye Bank focuses on retail and commercial banking, which is also the main focus areas of Mainstreet Bank.

    The audited report and accounts of Mainstreet Bank for the year ended December 31, 2013, showed that retail and commercial banking contributed 78 per cent, 36 per cent and 18 per cent of total deposits, total loans and profit before tax. Mainstreet Bank’s savings and demand deposits accounted for 21 per cent and 43 per cent of the deposit mix, which also demonstrated its focus on these two segments. A second generation leader, Mainstreet Bank has a large pool of loyal institutional and corporate customers, which, in spite of its status as an AMCON-owned bank, ensures that the bank retained almost its two million customers after the takeover.

    Also, Mainstreet Bank Limited has a history of successfully managing agricultural loans, which accounted for 12.6 per cent and 16.9 per cent of its loan portfolio in 2012 and 2013, second only to “general” sector. Analysts have said Mainstreet Bank’s expertise in managing agric loans made its non-performing loan ratio very negligible at 0.01 per cent, where Skye Bank saw a significant opportunity to improve its expertise in this area, and therefore raise its market share in the agriculture sector. This will position Skye Bank very strategically to partner with, and participate in the Federal Government’s short and medium term planned strategic investments and budgetary allocation to the agriculture sector.

    Besides driving growth with its inorganic strategy, Skye Bank, organically, has been witnessing a notable upturn in its performance.  The bank recorded a pre-tax profit of N12.3 billion on a top-line of N97.13 billion in the third quarter. Key extracts of the interim report and accounts of the bank for the nine-month period ended September 30, 2014 showed modest growths in some performance indices. The pre-tax profit of N12.3 billion represented a quarter-on-quarter growth of 33 per cent. With gross earnings of N97.1 billion, the bank was able to reduce its interest expense by 15 percent year-on-year to close at N30.3 billion compared with N35.7 billion as at September 2013.

  • SEC clears Skye Bank’s Mainstreet Bank acquisition

    Securities and Exchange Commission (SEC) has no objection against the acquisition of Mainstreet Bank Limited by Skye Bank Plc, clearing the way for Skye Bank to complete the acquisition process and begin integration of the acquired bank.

    After regulatory review, SEC, the apex capital market regulator which also has the sole jurisdictional authority on mergers and acquisitions, has given”No Objection” consent to the acquisition.

    The “No Objection” consent implies that SEC had reviewed the entire acquisition transaction and found that it duly complied with extant laws, rules and regulations and best practices. In a reversed case, any objection by SEC must be rectified before the closure of the transaction. In the event of irreconcilable objection, SEC is statutorily empowered to stop the transaction.

    Ahead of the November 4 deadline, Skye Bank had on October 31 paid the 80 per cent balance for the full acquisition of the entire issued shares of Mainstreet Bank to the Asset Management Corporation of Nigeria (AMCON), thus making Skye Bank the new owner of Mainstreet Bank. It had earlier on October 9 paid the mandatory deposit of 20 per cent for the acquisition of Mainstreet Bank. The payment of the 80 per cent balance to AMCON wholly fulfilled the terms of the Share Sale and Purchase Agreement earlier signed by both AMCON and Skye Bank and now put the latter in ownership of Mainstreet Bank.

    Regulatory filing obtained by The Nation showed that SEC had issued a “No Objection” letter to the Skye Bank’s Mainstreet Bank acquisition. Regulatory sources and major parties to the transaction confirmed the clearance.

    Sequel to the clearance, Greenwich Trust Limited, a broker-dealer member of the Nigerian Stock Exchange (NSE), which is acting as professional adviser to Skye Bank, has notified the Exchange that the bank will now move on to complete the post-acquisition process.

    The clearance came on the heels of favourable analysts’ review of the transaction. Financial and investment analysts across a broad spectrum of leading Nigerian and international investment companies said the acquisition holds significant positive prospects.

    The analysts said the acquisition has placed Skye Bank as a bank to watch given the immense potential and synergies that the bank could extract from the acquisition to further entrench its commercial banking operations and extended its branch network.

    According to analysts, the acquisition could significantly impact on the performance of the bank and further reconfigure the Nigerian banking with expectations that Skye Bank, which has already been designated as one of Nigeria’s eight systemically important banks, will move on to the topmost rank of the banking industry.  Skye Bank is expected to move the ladder up in all measurable indices – size, spread, strength, resistance, profitability and returns.

    Analysts were unanimous that with detailed and seamless execution of post-acquisition integration, there would be considerable values from the acquisition in terms of Skye Bank’s reach and assets as the bank leapfrogs on the back of this to become one of the biggest and largest banks in the country in terms of branch network.

    Kato Mukuru, Partner and Head of Equity Research at Exotix Partners LLP, said the deal was a major positive step for Skye Bank.

    According to him, while it may be too early to fully review the financial impact of the transaction, there is no doubt that the acquisition represented a major leap for Skye Bank.

    “While we do not have enough detail on the transaction to comment on the financial impact, but I can safely say that this deal is nothing short of transformational for Skye Bank and if executed well, it could put them in a position to enter the elite group of tier 1 banks,” said Mukuru.

    Exotix is a major global finance and investment companies with considerable imprints in world and Africa’s commercial centres. It coordinates its global operations through five major offices in London, New York, Lagos, Dubai and Nairobi.

    “Scale is critical to banking in Nigeria and we all know that this acquisition fills a major regional gap – the North, in Skye Bank’s current distribution,” said Mukuru.

    Head of research and intelligence at BGL Plc, Mr. Femi Ademola, said the acquisition could enhance the performance of Skye Bank noting that there are substantial values and synergies that could come in terms of spread and reach and deposit assets.

    “I think the acquisition is very positive for Skye Bank Plc,” Ademola said.

    According to him, “the acquisition will improve the Skye Bank’s capital adequacy and liquidity ratios since most of the Mainstreet Bank’s assets are invested in very liquid assets. Consequently, it is expected that the acquisition will also help to boost the Skye Bank’s profitability, going forward”.

    Group head, research, Lead Capital Plc, Sadiq Waziri, said the most significant gains to Skye Bank would come in terms of the expanded branch network and the resultant increase in customers, particularly savings and current account depositors, which are the cheapest form of deposits.

    “Mainstreet Bank was formally Afribank, which was established in 1959; the bank is endowed with a lot physical assets – properties in prime areas, which Skye Bank would benefit from,” Waziri said.

    Head, Trade Execution, Securities Africa Financial Limited, Akinkunmi Popoola, pointed out that the bigger branch network would enable Skye Bank to mobilize more low cost deposits and enhance its lending capacity, which will translate to improvement in loan-deposit ratio as the bank can rely more on its own deposits to grant loans to its customers.

    “This is helpful at a time like this when liquidity of banks generally is threatened by the raising of Cash Reserve Requirement (CRR) on public funds by the Central Bank of Nigeria (CBN),” Popoola said.

    “Investors and shareholders should expect to see value creation in form of capital appreciation and improved dividend because ultimately the bigger Skye Bank should be able to post decent profit going forward. The banking sector will also benefit as the development is expected to emphasize the banking sector as the preferred sector by prospective investors,” Popoola said

  • ‘Skye Bank could create better values from Mainstreet Bank acquisition’

    Financial and investment analysts across a broad spectrum of leading Nigerian and international investment companies have said the recent acquisition of Mainstreet Bank Limited by Skye Bank Plc holds significant positive prospects for the bank.

    The analysts said the acquisition has placed Skye Bank as a bank to watch given the immense potential and synergies that the bank could extract from the acquisition to further entrench its commercial banking operations and extended its branch network.

    According to analysts, the acquisition could significantly impact on the performance of the bank and further reconfigure the Nigerian banking with expectations that Skye Bank, which has already been designated as one of Nigeria’s eight systemically important banks, will move on to the topmost rank of the banking industry.  Skye Bank is expected to move the ladder up in all measurable indices – size, spread, strength, resistance, profitability and returns.

    Ahead of the November 4 deadline, Skye Bank had on October 31 paid the 80 per cent balance for the full acquisition of the entire issued shares of Mainstreet Bank to the Asset Management Corporation of Nigeria (AMCON), thus making Skye Bank the new owner of Mainstreet Bank. It had earlier on October 9 paid the mandatory deposit of 20 per cent for the acquisition of Mainstreet Bank. The payment of the 80 per cent balance to AMCON wholly fulfilled the terms of the Share Sale and Purchase Agreement earlier signed by both AMCON and Skye Bank and now put the latter in ownership of Mainstreet Bank.

    Analysts were unanimous that with detailed and seamless execution of post-acquisition integration, there would be considerable values from the acquisition in terms of Skye Bank’s reach and assets as the bank leapfrogs on the back of this to become one of the biggest and largest banks in the country in terms of branch network.

    Kato Mukuru, Partner and Head of Equity Research at Exotix Partners LLP, said the deal was a major positive step for Skye Bank.

    According to him, while it may be too early to fully review the financial impact of the transaction, there is no doubt that the acquisition represented a major leap for Skye Bank.

    “While we do not have enough detail on the transaction to comment on the financial impact, but I can safely say that this deal is nothing short of transformational for Skye Bank and if executed well, it could put them in a position to enter the elite group of tier 1 banks,” said Mukuru.

    Exotix is a major global finance and investment company with considerable imprints in world and Africa’s commercial centres. It coordinates its global operations through five major offices in London, New York, Lagos, Dubai and Nairobi.

    “Scale is critical to banking in Nigeria and we all know that this acquisition fills a major regional gap – the North, in Skye Bank’s current distribution,” said Mukuru.

    Head of research and intelligence at BGL Plc, Mr. Femi Ademola, said the acquisition could enhance the performance of Skye Bank noting that there are substantial values and synergies that could come in terms of spread and reach and deposit assets.

    “I think the acquisition is very positive for Skye Bank Plc,” Ademola said.

    According to him, “the acquisition will improve the Skye Bank’s capital adequacy and liquidity ratios since most of the Mainstreet Bank’s assets are invested in very liquid assets. Consequently, it is expected that the acquisition will also help to boost the Skye Bank’s profitability, going forward”.

    Group head, research, Lead Capital Plc, Sadiq Waziri, said the most significant gains to Skye Bank would come in terms of the expanded branch network and the resultant increase in customers, particularly savings and current account depositors, which are the cheapest form of deposits.

    “Mainstreet Bank was formally Afribank, which was established in 1959; the bank is endowed with a lot physical assets – properties in prime areas, which Skye Bank would benefit from,” Waziri said.

    Head, Trade Execution, Securities Africa Financial Limited, Akinkunmi Popoola, pointed out that the bigger branch network would enable Skye Bank to mobilize more low cost deposits and enhance its lending capacity, which will translate to improvement in loan-deposit ratio as the bank can rely more on its own deposits to grant loans to its customers.

    “This is helpful at a time like this when liquidity of banks generally is threatened by the raising of Cash Reserve Requirement (CRR) on public funds by the Central Bank of Nigeria (CBN),” Popoola said.

    “Investors and shareholders should expect to see value creation in form of capital appreciation and improved dividend because ultimately the bigger Skye Bank should be able to post decent profit going forward. The banking sector will also benefit as the development is expected to emphasize the banking sector as the preferred sector by prospective investors,” Popoola said.

    The benefit, he said, will also spread to the larger Nigerian capital market in terms of trading activity and capitalisation.

    Head, Research and Investment Advisory, Sterling Capital Markets, Sewa Wusu, said the acquisition would improve the operational performance of the bank and would create better returns to shareholders in form of enhanced dividend and capital appreciation.

    According to him, the acquisition, operationally, is a game-changer for Skye Bank given the possible synergies and the impact on the balance sheet and profitability of the bank while it would also increase the bank’s market position in the banking industry and at the stock market.

    Analysts have said the potential impact will be big on Skye Bank’s reach and assets. Mainstreet Bank has nine subsidiaries and a large distribution network comprising of 201 branches across 35 out of 36 states in Nigeria and the Federal Capital Territory, Abuja. It equally has nine cash Centres and 205 Automated Teller Machines (ATMs).

    Skye Bank, with dominant operations in the Southwest, is also banking on Mainstreet Bank to deepen its penetration of the South-East and South-South regions where it is currently less represented. Some 26 per cent or 54 branches of Mainstreet Bank’s network are located in the two regions. These two regions also accounted for 28 per cent of Mainstreet Bank’s over 1.9 million customers, second only to Lagos with 37 per cent.

    With smooth and seamless integration, Skye Bank will be able to make valuable in-roads into these two regions without the need to incur huge expenditure while the acquisition would bring valuable concurrence and synergies from the mutual focus areas of commercial and retail banking of the two entities in a larger Skye Bank. Skye Bank focuses on retail and commercial banking, also the main focus areas of Mainstreet Bank.

    Latest audited report and accounts of Mainstreet Bank for the year ended December 31, 2013 showed that retail and commercial banking contributed 78 per cent, 36 percent, and 18 per cent of total deposits, total loans and profit before tax respectively.

     

     

  • How acquisition of Mainstreet Bank will boost Skye Bank’s status

    How acquisition of Mainstreet Bank will boost Skye Bank’s status

    Ibrahim Apekhade Yusuf in this report takes a look at the economic fundamentals of Skye Bank Plc following its recent acquisition of the Mainstreet Bank, one of the nationalised banks owned by the Asset Management Corporation of Nigeria (AMCON).

    For good measure a lot is bound to change in the banking sector as economic and financial pundits see the current wave of mergers and acquisition in the country as the second round of consolidation especially as banks like Skye, which acquired Mainstreet Bank, has invariably attained the status of mega banks with solid capital base.

    Road to Mainstreet acquisition

    Between September 11, 2014 and now, the Asset Management Corporation of Nigeria (AMCON) announced names of the preferred bidders for two of its three banks penciled down for sale.

    On September 11, AMCON announced Heritage Bank Limited as the preferred bidder for Enterprise Bank, three weeks after, it named Skye Bank Plc as the preferred bidder for Mainstreet Bank Limited.

    Skye Bank, a leading tier 2 Bank in Nigeria, was among the eight banks recently designated as ‘Systemically Important Banks’, which reflects its industry leadership, strong market share, diverse location spread, and strong brand equity. AMCON, in a statement signed by its Head, Corporate Communications Strategy and Research, Mr. Kayode Lambo, announced Cedar One Investment Partners Limited as the first reserve bidder and Fidelity Bank Plc as the second reserve bidder for the acquisition of the entire issued and fully paid up ordinary shares of Mainstreet Bank Limited.

    The corporation explained that its board of directors had approved the transaction. It, however, pointed out that the completion of the transaction was subject to the fulfillment of the conditions precedent as stated in the Share Sale and Purchase Agreement (SPA) to be executed with Skye Bank as well as the receipt of all required regulatory approvals from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).

    However, within four days of the announcement of Skye Bank as the preferred bidder by AMCON, the bank effected payment of the mandatory 20 per cent before the expiry of the one-week given.  This was on October 9, the same day it signed the Share Sale and Purchase Agreement. And in a rare display of buoyancy, leadership and commitment to see the deal is properly closed, the bank again, on October 31 paid the 80 per cent balance to complete the takeover of Mainstreet with one week to the deadline given by AMCON.

    Implication for banking landscape

    In the view of analysts, the acquisition of Mainstreet Bank has launched Skye into the league of the top three banks in Nigeria and with very promising future. It is believed that the bank will leverage on the widespread of Mainstreet branch network to consolidate its calculated advancement thereby giving it a superior place in the league of Nigeria’s top three banks.

    According to Skye Bank, the acquisition will avail it of many benefits, including cost leadership, business optimisation, and greater ability to offer business convenience to its teeming retail and commercial customers, with a combined branch network of over 450, across all the states of the Federation.

    Mainstreet Bank, then AfriBank used to be the fourth biggest bank, after First Bank, Union Bank and UBA.

    AMCON had announced Skye Bank as the preferred bidder for the acquisition of all its interest in Mainstreet Bank, representing the entire capital of the bridge bank. Skye Bank emerged the preferred bidder after a rigorous bidding exercise that spanned five months, with over 20 bidders contending.

    Reacting to the development, Skye Bank said the acquisition of Mainstreet Bank was part of its strategic plan for growth. Skye Bank emerged from the very successful merger and integration of five banks in 2006, following the first phase of the banking industry consolidation. The Bank intends to leverage its wealth of experience from the successful integration of five banks to drive efficiency, increase market share and ultimately ramp up stakeholder value from the acquisition of Mainstreet Bank.

    The bank said the acquisition would help deepen its penetration of the South East and South South regions where it is currently less represented, explaining that out of Mainstreet Bank’s 201 branches and nine subsidiaries, 26 per cent or 54 branches are located in the two regions.

    “These two regions also accounted for 28 per cent of Mainstreet Bank’s over 1.9 million customers, second only to Lagos with 37 per cent. This clearly shows that the integration of Mainstreet Bank will enable us make valuable in-roads into these two regions without the need to incur huge expenditure had we remained a single entity as Skye Bank”, the top lender explained.

    Besides, Skye Bank explained that the acquisition would bring valuable synergies from the mutual focus areas of commercial and retail banking of the two entities in a larger Skye Bank. The bank noted that its focus is on retail and commercial banking, which is also the main focus areas of Mainstreet Bank Limited.

    A flip through Mainstreet Bank Limited’s 2013 audited results, put retail and commercial banking contribution at 78 per cent, 36 percent, and 18 per cent of total deposits, total loans and profit before tax. Also, Mainstreet’s savings and demand deposits accounted for 21 per cent and 43 per cent of deposit mix, which also demonstrated its focus on these two segments.

    Mainstreet Bank, according to insiders to the deal, has a large pool of very loyal institutional and corporate customers, in spite of its status as an AMCON-owned bank, ascribing customer loyalty to the existence of Mainstreet’s current 1.9 million customers, a little less than the pre-AMCON takeover figures.

    Skye Bank’s fundamentals

    Skye Bank Plc has announced its Third Quarter result with moderate growth in some performance indices. It recorded a Profit before tax of N12.3billion during the period which represents a quarter on quarter growth of 33 per cent%.

    With gross earnings of N97.1billion, the bank was able to reduce its interest expense by 15 per cent Year on year to close at N30.3billion compared to N35.7billion as at September 2013. This is in line with its operational strategy of increasing the volume of low cost funds in its deposit portfolio.

    The Bank closed with a year-to-date net loans and advances balance of N576billion showing a 6% increase Year on year. Similarly, customer deposits grew to N801.7billion as against N726.8billion of the previous year while asset size remained strong at N1.1trillion with a 3 per cent year-on-year growth.

    The bank said barring any unforeseen circumstances, the growth pattern would be improved on in the remaining period of the financial year.

    “Our loan impairment charge increased by 62 per cent Year on year to N7.5billion, being a deliberate policy of aggressive provisioning early in the year to enable a fairly sustained position and avoid high concentration in the last quarter of the year. Non-interest income improved by 15 per cent YoY to N17.6billion compared to N15.2billion of the corresponding period in 2013.”

    To analysts, combining Mainstreet Bank numerous branches with Skye Bank’ the new status may sure give First Bank, Zenith and GT Bank a run for their money.

    Skye Bank parades Sterling management team. As if they knew they would go this big, there has been continuous restructuring in the last few months, including a new Managing Director/Chief Executive, Mr. Timothy Oguntayo, with futuristic outlook working with people of equal strength.

  • Skye Bank: Riding the wave of Mainstreet Bank’s acquisition

    Skye Bank: Riding the wave of Mainstreet Bank’s acquisition

    As the news of the full payment for the acquisition of Mainstreet Bank Limited by Skye Bank Plc hit the stock market, share price of Skye Bank raced through the down market to record the highest gain on Monday. Capital Market Editor, Taofik Salako, reports that the acquisition may be a game-changer for Skye Bank

    Skye Bank was the best-performing overall stock at the stock market on Monday. Against the worsening downtrend at the Nigerian Stock Exchange (NSE), Skye Bank’s share price recorded the maximum allowable daily percentage change of 10 per cent. Besides being the highest gain for the day, the significance of the bank’s upswing was further impressed by its contrarian nature. The market opened on Monday with renewed bearishness. With nearly four losers to every gainer, average decline at the NSE was 0.55 per cent, a downturn that accentuated the loss of 3.93 per cent recorded last week. But Skye Bank rode on the momentum of the news of the completion of the payment for its acquisition of the entire issued shares of Mainstreet Bank, an inspiring news that market pundits believed would continue to leapfrog the performance of the bank in the period ahead.

    Skye Bank at the weekend paid the 80 per cent balance for the full acquisition of the entire issued shares of Mainstreet Bank to the Asset Management Corporation of Nigeria (AMCON), thus making Skye Bank the new owner of Mainstreet Bank. In a confirmation of its often-stated robust balance sheet, Skye Bank was said to have paid some N100 billion to AMCON on Friday October 31 as balance for the acquisition, which was valued at some N120 billion. The deadline for the payment of the balance was November 3, 2014.

    Skye Bank had on October 9, 2014 paid the mandatory deposit of 20 per cent for the acquisition of Mainstreet Bank, a deal that was valued at between N120 billion and N126 billion. The differential in the value was due to the variation in exchange rate base used by the different sources for the dollar-based value of the deal. The payment of the 80 per cent balance to AMCON wholly fulfilled the terms of the Share Sale and Purchase Agreement earlier signed by both AMCON and Skye Bank and now put the latter in ownership and control of Mainstreet Bank.

    The stock market’s response, the gauge to measure investors and stakeholders’ perception of a transaction, was driven by pundits’ assessments of the transaction process, its potential impact on the performance of Skye Bank and the banking industry generally. The Mainstreet Bank’s transaction was a highly competitive sale process, a transaction that was the cynosure of all eyes given the historic importance of Mainstreet Bank, a bridge bank that metamorphosed from the rubbles of Afribank Nigeria Plc, a quoted bank that was once Nigeria’s fourth largest bank. The rigorous and competitive bidding process involved 25 Nigerian and foreign bidders and was coordinated for AMCON by Barclays Africa Group Limited and Afrinvest West Africa Limited as Financial Advisers and Banwo & Ighodalo as Legal Advisers. In the end, Skye Bank Plc, Cedar One Investment Partners Limited and Fidelity Bank Plc emerged as preferred bidder, first and second reserve bidders respectively. It was a transaction adjudged by many as transparent and credible.

    But even with the payment of the 20 per cent mandatory deposit, totaling some N20 billion, many pundits were still on the sideline playing the waiting game. The proviso, as stated in the purchase agreement, was that in the event that Skye Bank failed to make the balance payment, the deal will automatically move to Cedar One and in the event of the failure of the first reserve bidder, the deal will move to Fidelity Bank, another quoted bank that wanted to leverage growth with acquisition. Amidst skepticism by some, Skye Bank promised to complete the transaction within the timeline. It kept faith with the weekend payment, sending all the bystanders on the rush for the shares of the bank.

    Besides, the acquisition ranked as one of the biggest acquisitions in Nigeria, a deal that confirmed the robustness of the balance sheet of Skye Bank and the growing depth of the mergers and acquisition market in the country.

    But the most important consideration, to most stakeholders, is the potential impact on the operations and performance of Skye Bank. The acquisition leapfrogged Skye Bank as one of the biggest and largest banks in the country in terms of branch network. Mainstreet Bank has nine subsidiaries and a large distribution network comprised of 201 branches across 35 out of 36 states in Nigeria and the Federal Capital Territory, Abuja. It equally has nine cash centres and 200 Automated Teller Machines (ATMs).

    Skye Bank, with dominant operations in the Southwest, is banking on Mainstreet Bank to deepen its penetration of the South East and South South regions where it is currently less represented. Some 26 per cent or 54 branches of Mainstreet Bank’s network are located in the two regions. These two regions also accounted for 28 per cent of Mainstreet Bank’s over 1.9 million customers, second only to Lagos with 37 per cent.

    “This clearly shows that the integration of Mainstreet Bank will enable us make valuable in-roads into these two regions without the need to incur huge expenditure had we remained a single entity as Skye Bank”, Skye Bank had stated in its preview of the transaction. Besides, Skye Bank expected that the acquisition would bring valuable synergies from the mutual focus areas of commercial and retail banking of the two entities in a larger Skye Bank. Skye Bank focus is on retail and commercial banking, also the main focus areas of Mainstreet Bank.

    Latest audited report and accounts of Mainstreet Bank for the year ended December 31, 2013 showed that retail and commercial banking contributed 78 per cent, 36 percent, and 18 per cent of total deposits, total loans and profit before tax respectively. Also, Mainstreet Bank’s savings and demand deposits accounted for 21 per cent and 43 per cent of deposit mix, which also demonstrated its focus on these two segments.

    Mainstreet Bank, according to insiders to the deal, has a large pool of very loyal institutional and corporate customers, in spite of its status as an AMCON-owned bank, ascribing customer loyalty to the existence of Mainstreet Bank’s current 1.9 million customers, a little less than the pre-AMCON takeover figures.

    Also, Mainstreet Bank Limited has a history of successfully managing agricultural loans, with agric loans accounting for 12.6 per cent and 16.9 per cent of its loan portfolio in 2012 and 2013, second only to ‘general’ sector. Analysts have said Mainstreet Bank’s expertise in managing agric loans made its non-performing loan ratio to be very negligible at 0.01 per cent, where Skye Bank saw a significant opportunity to improve its expertise in this area, and therefore raise its market share in the agriculture sector.

    The acquisition came as Skye Bank was entering a major recovery phase. The bank recorded a pre-tax profit of N12.3 billion on a top-line of N97.13 billion in the third quarter. Key extracts of the interim report and accounts of the bank for the nine-month period ended September 30, 2014 showed modest growths in some performance indices. The pre-tax profit of N12.3 billion represented a quarter-on-quarter growth of 33 per cent but a year-on-year decline of 15.3 per cent.

    With gross earnings of N97.1billion, the bank was able to reduce its interest expense by 15 per cent year-on-year to close at N30.3 billion compared to N35.7 billion as at September 2013. The bank stated that this was in line with its operational strategy of increasing the volume of low cost funds in its deposit portfolio. The bank closed with a year-to-date net loans and advances balance of N576 billion, showing a six per cent increase year-on-year. Similarly, customer deposits grew to N801.7 billion as against N726.8 billion of the previous year while asset size remained strong at N1.1trillion, an increase of three per cent year-on-year growth.

    In a statement, the bank noted that it would improve on the growth pattern in the remaining period of the financial year.

    “Our loan impairment charge increased by 62 per cent year on year to N7.5 billion, being a deliberate policy of aggressive provisioning early in the year to enable a fairly sustained position and avoid high concentration in the last quarter of the year. Non-interest income improved by 15 per cent year-on-year to N17.6 billion compared to N15.2 billion of the corresponding period in 2013,” the bank stated.

    According to the bank, the deliberate focus on cost reduction organisation-wide has paid off with a year-on-year reduction of one per cent in operating expenses which closed at N46.9 billion as against N47.2billion in September 2013.

    Skye Bank, a leading tier 2 bank that was recently designated among the eight ‘systemically important banks’, looks to leveraging on the acquisition to enhance its market position and returns to investors.

    According to the bank, the acquisition of Mainstreet Bank was part of its strategic plan for growth as it intends to leverage on its wealth of experience from earlier successful mergers and acquisitions to drive efficiency, increase market share and ultimately ramp up stakeholder value from the acquisition of Mainstreet Bank. Skye Bank emerged from the merger and integration of five banks in 2006, following the first phase of the banking industry consolidation.

    The management of Skye Bank outlined that the acquisition will avail it of many benefits, including cost leadership, business optimisation, and greater ability to offer business convenience to its teeming retail and commercial customers, with a combined branch network of over 450, across all the states of the Federation.

    After the bank distributed N3.96 billion as dividends for the 2013 business year earlier this year, chairman, Skye Bank Plc, Mr. Olatunde Ayeni, had assured shareholders that the bank would continue to add value and make shareholders’ investments in the bank worthwhile.

    According to him, in 2014, all efforts would continue toward implementing the bank’s plans in the medium term and well into the future. The quest to provide the most efficient customer service, as espoused in the service charter, remains unchanged.

    Managing director, Skye Bank Plc, Mr. Timothy Oguntayo, said the bank’s growth in the current year will continue with the implementation of its strategy while increasing its customer base and market share.

    As Skye Bank progresses with the integration process, stakeholders, particularly investors, would be looking for the value creation from the deal.

     

     

  • Skye Bank pays N100b to complete acquisition of Mainstreet Bank

    Skye Bank pays N100b to complete acquisition of Mainstreet Bank

    Skye Bank Plc at the weekend paid the 80 per cent balance for Mainstreet Bank’s shares, beating today’s deadline.

    Assets Management Corporation of Nigeria (AMCON) and investment banking industry sources confirmed the payment and the completion of the acquisition.

    Sources said Skye Bank paid N100 billion to AMCON on Friday as balance for the acquisition, which was valued at N120 billion.

    Skye Bank, on October 9, paid the mandatory deposit of 20 per cent for the acquisition,  a deal that was valued at between N120 billion and N126 billion. The differential in the value was due to the variation in the exchange rate base used by the various sources for the dollar-based value of the deal.

    The payment of the 80 per cent balance has fulfilled the terms of the Share Sale and Purchase Agreement signed by AMCON and Skye Bank.

    With the payment, Skye Bank Plc has completed one of the biggest acquisitions in Nigeria, a deal which also leapfrogged Skye Bank as one of the biggest and largest banks in terms of branch network.

    Mainstreet Bank has nine subsidiaries and a large distribution network comprising 201 branches across 35  states and the Federal Capital Territory, Abuja. It has nine cash centres and 200 Automated Teller Machines (ATMs).

    The management of Skye Bank had said acquisition was one of the bank’s strategic plans for growth, having itself been a product of one of the complex mergers and acquisitions. Skye Bank emerged from the merger and integration of five banks in 2006, following the first phase of the banking consolidation.

    The bank said it intends to leverage its wealth of experience from the successful integration of five banks to drive efficiency, increase market share and, ultimately, ramp up stakeholder value from the acquisition of Mainstreet Bank.

    The management of Skye Bank has also assured the customers of Mainstreet Bank of excellent service and superior value in the enlarged Skye Bank.

    The acquisition will avail the bank of many benefits, including cost leadership, business optimisation, and greater ability to offer business convenience to its teeming retail and commercial customers, with a combined branch network of over 450, across all the states.

    Skye Bank, a leading tier 2 Bank, was among the eight banks recently designated as “Systemically Important Banks”, which reflects its industry leadership, strong market share, diverse location spread, and strong brand equity.