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Skye Bank delivers 316 % return to investors
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John Aboh, acting managing director, Wema Bank
Skye Bank plc delivered a return of 316 percent to investors, closing as one of the stocks with the best returns last year.
According to an analysis of the stocks that had the best performance in the stock market in 2007 by the research department of the FSDH Securities Limited, Skye Bank’s share price rose by N13.06 from N4.13 at the beginning of 2007 to close at N17.19 at the end of the year.
It came behind Fidelity Bank (457 per cent),First City Monument Bank Plc (374 per cent), and Wema Bank (368 per cent).
However, while the returns of Skye Bank did not include the dividend, those of Fidelity Bank and FCMB included the dividends they declared last year.
Market watchers submitted that the surge in the equity price of the Bank stemmed from expectations that it would declare impressive results for the year ended September 30, 2007.
The bank recorded gross earnings of N39.367 billion for the year ended September 30,2007, up from N20.7 billion in 2006.Profit after tax grew from N2.465 billion in 2006 to N5.517 billion in 2007.483million.
Parties to the ongoing N50 billion offer said that the investors should expect a bumper harvest thereafter.
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 to raise the N50 billion. The offer is being made with an incentive as existing investors are buying the new shares at a discount of N4.69, given the market price of N17.19 per share.
Also, new investors buying into the bank through the offer are getting a discount of N4 per share.
The funds being raised will 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.
The board has projected profit after tax of N16.981 billion in 2008, N19.774 billion in 2009 and N21.883 billion in 2010.
In its report of the offer, analysts at Lead Capital Limited said
that if the offer a 100 per cent subscribed the shares outstanding will increase to 11.2 billion ordinary shares.
“Our projected year forward earnings, based on their interim results and the effect of its offer proceeds, is N13 billion. Therefore, based on its offer price of N14.00, Skye Bank is valued at 12.06 times its earnings. Its 2008 forecast earnings yield will stand at 8.3 per cent while its dividend yield will be 4.1 per cent. All these indices
compare favourably with industry averages of 17.26 times, 5.98 per cent and 2.93 per cent respectively.
“Based on the above analysis and considering other market determined technical factors, we place a buy recommendation on the shares of Skye Bank for the short and long term.
The bank is reputed to offer a wide range of value added services to individuals, corporate bodies, conglomerates, multinationals, governments, institutions and agencies. It is involved in investment and capital market operations, telecommunications, oil, gas and
power sector financing, transportation, aviation, public sector funds management amongst others.
It came behind Fidelity Bank (457 per cent),First City Monument Bank Plc (374 per cent), and Wema Bank (368 per cent).
However, while the returns of Skye Bank did not include the dividend, those of Fidelity Bank and FCMB included the dividends they declared last year.
Market watchers submitted that the surge in the equity price of the Bank stemmed from expectations that it would declare impressive results for the year ended September 30, 2007.
The bank recorded gross earnings of N39.367 billion for the year ended September 30,2007, up from N20.7 billion in 2006.Profit after tax grew from N2.465 billion in 2006 to N5.517 billion in 2007.483million.
Parties to the ongoing N50 billion offer said that the investors should expect a bumper harvest thereafter.
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 to raise the N50 billion. The offer is being made with an incentive as existing investors are buying the new shares at a discount of N4.69, given the market price of N17.19 per share.
Also, new investors buying into the bank through the offer are getting a discount of N4 per share.
The funds being raised will 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.
The board has projected profit after tax of N16.981 billion in 2008, N19.774 billion in 2009 and N21.883 billion in 2010.
In its report of the offer, analysts at Lead Capital Limited said
that if the offer a 100 per cent subscribed the shares outstanding will increase to 11.2 billion ordinary shares.
“Our projected year forward earnings, based on their interim results and the effect of its offer proceeds, is N13 billion. Therefore, based on its offer price of N14.00, Skye Bank is valued at 12.06 times its earnings. Its 2008 forecast earnings yield will stand at 8.3 per cent while its dividend yield will be 4.1 per cent. All these indices
compare favourably with industry averages of 17.26 times, 5.98 per cent and 2.93 per cent respectively.
“Based on the above analysis and considering other market determined technical factors, we place a buy recommendation on the shares of Skye Bank for the short and long term.
The bank is reputed to offer a wide range of value added services to individuals, corporate bodies, conglomerates, multinationals, governments, institutions and agencies. It is involved in investment and capital market operations, telecommunications, oil, gas and
power sector financing, transportation, aviation, public sector funds management amongst others.
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