Skye Bank to release its financial statements in August

Date:

In a notice sent to the Nigerian Stock Exchange (NSE) today, Skye Bank Plc may have hinted at plans to release its backlog of financial statements dating back to 2016.

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An excerpt from the notice states that the bank’s board will be meeting to discuss several issues including its unaudited results for the period ended June 2018.

Skye Bank last released its results for the financial year ended December 2015. From inference, the backlog of results would either have to be released before or alongside results for the most recent quarter.

Several tier two peers have since released financial statements for the second quarter ended June 2018.
Why the delay?

The Central Bank of Nigeria (CBN) in July 2016 dissolved the bank’s board.

The CBN took the action due to the inability of the bank to raise required capital and it being a systemically important institution. This means a collapse of the bank would have an adverse effect on the financial industry as a whole. Skye Bank was unable to raise the much-needed capital, despite being given over a year to do so.

Specifically, the bank’s Liquidity and Non-performing loan Ratios were below and above the required thresholds.

Liquidity ratio is the ratio of a banks liquid assets to its liabilities. In other words, a bank’s cash balance plus assets that it can easily convert to cash to the total liabilities owed by the bank, which is typically your deposits. In Nigeria, banks are supposed to have a liquidity ratio of 30%.

The NPL is a ratio of a bank’s bad loans to their total loans. The Central Bank set an NPL ratio of 5%, and expects banks to stay within this range.

The tenure of the current board was extended earlier this month. Since appointment, it has sold off several subsidiaries and pursued bad loans including those taken by entities controlled by the immediate past chairman Fola Ayeni.
How does it affect you?

Fundamental investors had long exited the stock in view of the challenges facing the bank. Nairametrics has consistently placed a SELL recommendation on the stock.

Despite the absence of results, the stock rallied sharply in the first quarter of the year and was one of the best-performing stocks year to date. Year to date the stock is up 34% outperforming the NSE which is down 4.75% year to date. The stock could witness a sell-off whenever its results are released.

Skye Bank is currently trading at N0.67 in today’s trading session on the NSE.

Gbenga Samson
Gbenga Samsonhttp://ThisDayLive.com
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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