BusinessDay... the voice of business: Skye Bank supports hybrid offer with ambitious forecast

Skye Bank supports hybrid offer with ambitious forecast
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Anonymous on 21 January, 2008 01:00:00
 
Specifically, the bank has projected a dividend of N6.741 billion for the year
ending September 30, 2008. This dividend, as contained in the offer prospectus,
is expected to rise to N7.865 billion in 2009 and N8.988 billion in 2010.
The dividends forecast the board said amount to N23.594 billion in three years
to be paid out of an estimated profit after tax of N58.638 billion.
The Bank is issuing 2.231 billion ordinary shares at N14.00 for public sub
subscription and 1.50 billion shares by way of rights to existing shareholders
at N12.50 per share. The offer which opened on Monday, January 14 and is
expected to close on February 20, 2007.
While existing investors are buying the new shares at a discount of N4.69,
given the market price of N17.19 per share, new investors buying into the bank
through the offer are getting a discount of N4 per share.
Managing Director/Chief Executive of the bank, Akinsola Akinfemiwa, said that
the funds being raised would be used to strengthen the bank’s retail
infrastructure in Nigeria. Besides, there are plans to boost the bank’s
subsidiaries’ capital base to support business growth; expand the bank’s
capital; network of branches and fund its working capital.
Specifically, Skye Bank plans to utilise N17.34 billion or 36.20 per cent to
beef up its working capital on a continuous basis.
A total of N15.476 billion or 32.3 per cent would be invested in the bank’s
subsidiaries in a bid to make them contribute better to the group’s top and
bottom-line growth within the next two years.
Skye Bank also plans to expand its branch network, within the next 36 months
with 21 new outlets proposed for Lagos, in addition to enhancing information
technology infrastructure. About N4.12 billion or 8.60 per cent of the net offer
proceeds will go for that purpose.
Going forward, Akinfemiwa said that the bank’s business development had
remained a solid platform for its future growth of the bank.
"Our primary focus will be to develop a full fledged retail banking entity
while placing strong emphasis on other areas that have enormous growth
potentials and consolidate on public sector relationships," he said.
He said retail business, which is premised on the middle class is currently
very large and not sufficiently served. She explained that Skye Bank has strong
potentials of being the growth engine for the take-off of the Nigerian economy.
"The retail and consumer market are more structured with identifiable buyer
values, which are currently untapped but can be fairly easily tapped. The
proportion of un-banked population in Nigeria is still significantly high and
specific focus on the segment will significantly boost deposit volumes," he
said.
He added that technology would continue to remain a major input into the
viability of the bank’s business.
"Our customers will have on-line real time access to their funds. We will
continue to use our technology prowess to provide innovative solutions for
customers," he said.