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Skye Bank Projects N23.5bn Dividend
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Akinsola Akinfemiwa, managing director, Skye Bank Plc
Existing and new investors buying into Skye Bank Plc through its ongoing hybrid offer should expect a bumper harvest in years ahead, in view of the robust financial projections the bank has made.
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 is expected to close on February 20, 2007.
Already, investors buying the shares are enjoying some discount. 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.
Apart from the discount, the bank has projected a dividend of N6.741 billion for the year ending September 30, 2008. This dividend, according to projections, contained in the offer prospectus, will rise to N7.865 billion in 2009 and N8.988 billion in 2010.
The dividend forecast will amount to N23.594 billion in three years to be paid out of a profit after tax of N58.638 billion.
Managing Director/Chief Executive of the bank, Akinsola Akinfemiwa, said the funds being raised would be used to deepen the bank’s retail infrastructure in Nigeria, strengthen 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 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.
Specifically, he said retail business, which is premised on the middle class is currently very large and not sufficiently served. Akinfemiwa further explained that Skye Bank has strong potentials of being the growth engine for the take-off of the Nigerian economy.
“The retail/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,” Akinfemiwa said.
The offer, which opened on Monday, January 14 is expected to close on February 20, 2007.
Already, investors buying the shares are enjoying some discount. 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.
Apart from the discount, the bank has projected a dividend of N6.741 billion for the year ending September 30, 2008. This dividend, according to projections, contained in the offer prospectus, will rise to N7.865 billion in 2009 and N8.988 billion in 2010.
The dividend forecast will amount to N23.594 billion in three years to be paid out of a profit after tax of N58.638 billion.
Managing Director/Chief Executive of the bank, Akinsola Akinfemiwa, said the funds being raised would be used to deepen the bank’s retail infrastructure in Nigeria, strengthen 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 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.
Specifically, he said retail business, which is premised on the middle class is currently very large and not sufficiently served. Akinfemiwa further explained that Skye Bank has strong potentials of being the growth engine for the take-off of the Nigerian economy.
“The retail/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,” Akinfemiwa said.
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