Skye Bank Plc has announced a profit before tax of N7.266 billion for its second quarter financial year ended June 30, 2014, indicating a decline of N3.283 billion or 31.13 per centcompared with N10.545 billion posted in the comparative period of 2013.
Profit after tax went down from N8.428 billion achieved in the corresponding period of last year to N5.786 billion within the period under review, representing a drop of N2.642 billion or 31.34 per cent.
The bank said that the reasons for the decline in its profit was due to its aggressive approach to loan provisioning in the earlier part of the year, an increase of 100 per centfrom N2.511 billion in June 2013 to N5.010 billion, with a view to streamlining provisioning on a quarter by quarter basis for easier comparison.
It however said that the marginal increase in operating expense from N30.877 billion in the previous year to N30.882 billion also affected the bank’s profitability. The bank within the period under review recorded a total asset of N1.131 trillion as against the N1.116 trillion it reported during the corresponding period in 2013, representing a marginal growth of 1.3 per cent.
Similarly, the bank’s total liabilities including deposits grew to N1.016 trillion at the end of June this year from N996.221 billion the previous year, an increase of 1.9 per cent.
In the result submitted at the Nigeria Stock Exchange yesterday, the bank attributed the growth in its total assets to its various business development activities in diverse sectors of the economy.
“Our half year 2014 results showed moderate improvement in the various performance indices. The cautious growth of our business lines coupled with a continuous improvement in our operational processes and enhanced efficiency are signposts to a promising end to the financial year.
“With gross earnings of N63.9 billion, we reduced our interest expense by 24 per cent year-on-year to close at N20.7 billion compared to N27.2 billion as at June 2013, in line with our operational strategy of increasing the volume of low cost funds in our deposit portfolio.
“Our loan impairment charge increased by 100 per cent year-on-year to N5.0 billion; being a deliberate policy of aggressive provisioning early in the year to enable a fairly sustained position and avoid high-figure concentration in the last quarter.”
The bank said that the exchange earnings improved by 5 per cent to N5.8 billion compared to N5.5 billion of the corresponding period in 2013, adding that the deliberate focus on cost reduction organisation-wide also paid off with a flat growth in operating expenses which closed at N30.8 billion against N30.9 billion in June 2013.
The bank’s asset size remained strong at N1.1 trillion with a 5 per cent year-to-date loan growth at N578.9 billion, while our deposit volume reduced marginally by 0.6 per cent year on year to N818.4 billion reflecting our strategy of substituting term deposits with demand deposits and savings.
