Skye Bank plc is strategically positioning for market leadership
going by its recent activities in the banking industry, in terms of
capital raising.
Last week, the bank was reported to be making plans to raise as much as N50 billion ($250m) by selling stock this year, as it seeks to boost liquidity and fund operations.
As explained by Timothy Oguntayo, managing director/chief executive
of the bank, the fund would be raised in second to third quarter of this
year. “Details will be announced after our annual meeting,” he told
Bloomberg in an interview.
This move is coming after the bank last year acquired Mainstreet Bank Limited. Skye Bank had in October last year completed the purchase of 100 percent shares of Mainstreet Bank from the Asset Management Corporation of Nigeria (AMCON).
The lender advanced 1.7 percent to N2.45 in Lagos trading, valuing the bank at about N32.4 billion. Skye Bank, which sold N20 billion of 90-day bonds last week, needs additional liquidity, Oguntayo said. The lender said it will sell as much as N100 billion of short-term local debt over the next year to increase cash.
The bank joins other lenders like Access Bank plc in raising capital amid measures imposed by the Central Bank of Nigeria to bolster the naira. The regulator had in 2013 named eight lenders including Skye Bank as systemically important and said they needed capital adequacy ratios of at least 16 percent.
In 2014, the regulator removed some assets banks were able to count as capital to increase their ability to withstand shocks six years after a financial crisis led to the failure of several Nigerian lenders. Skye Bank has $6.8 billion of assets and capital adequacy of 18.5 percent, according to data compiled by Bloomberg and the lender’s website.
Industry watchers see the recent development of the bank as timely and welcome as it would lead to broadened outreach and enhanced operations, leading also to employment generation and profit maximisation.
The bank recently signed an agreement with Stanbic IBTC Bank and Financial Market Dealers Quotation System (FMDQ) to issue N100 billion in commercial paper to increase its ability to do more transactions.
The bank is taking advantage of the Commercial Paper window to expand the number of instruments on its balance sheet, Oguntayo said, saying “the bank is driven to take advantage of this programme to increase awareness of the availability of this innovative product in the marketplace and to help them acquire investments that are tradable without suffering penalty.”
Skye Bank is only the second bank to take advantage of the Central Bank of Nigeria and FMDQ reintroduction of the Commercial Paper window since 2009; the transaction represents only the third since then.
The bank has investment Grade ratings from GCR, Standard & Poor’s, and Agusto & Co.; A- by Global Credit rating; ‘BBB’ by S&P, and ‘bbb’ by Agusto and Co.
Last week, the bank was reported to be making plans to raise as much as N50 billion ($250m) by selling stock this year, as it seeks to boost liquidity and fund operations.
As explained by Timothy Oguntayo, managing director/chief executive
of the bank, the fund would be raised in second to third quarter of this
year. “Details will be announced after our annual meeting,” he told
Bloomberg in an interview.This move is coming after the bank last year acquired Mainstreet Bank Limited. Skye Bank had in October last year completed the purchase of 100 percent shares of Mainstreet Bank from the Asset Management Corporation of Nigeria (AMCON).
The lender advanced 1.7 percent to N2.45 in Lagos trading, valuing the bank at about N32.4 billion. Skye Bank, which sold N20 billion of 90-day bonds last week, needs additional liquidity, Oguntayo said. The lender said it will sell as much as N100 billion of short-term local debt over the next year to increase cash.
The bank joins other lenders like Access Bank plc in raising capital amid measures imposed by the Central Bank of Nigeria to bolster the naira. The regulator had in 2013 named eight lenders including Skye Bank as systemically important and said they needed capital adequacy ratios of at least 16 percent.
In 2014, the regulator removed some assets banks were able to count as capital to increase their ability to withstand shocks six years after a financial crisis led to the failure of several Nigerian lenders. Skye Bank has $6.8 billion of assets and capital adequacy of 18.5 percent, according to data compiled by Bloomberg and the lender’s website.
Industry watchers see the recent development of the bank as timely and welcome as it would lead to broadened outreach and enhanced operations, leading also to employment generation and profit maximisation.
The bank recently signed an agreement with Stanbic IBTC Bank and Financial Market Dealers Quotation System (FMDQ) to issue N100 billion in commercial paper to increase its ability to do more transactions.
The bank is taking advantage of the Commercial Paper window to expand the number of instruments on its balance sheet, Oguntayo said, saying “the bank is driven to take advantage of this programme to increase awareness of the availability of this innovative product in the marketplace and to help them acquire investments that are tradable without suffering penalty.”
Skye Bank is only the second bank to take advantage of the Central Bank of Nigeria and FMDQ reintroduction of the Commercial Paper window since 2009; the transaction represents only the third since then.
The bank has investment Grade ratings from GCR, Standard & Poor’s, and Agusto & Co.; A- by Global Credit rating; ‘BBB’ by S&P, and ‘bbb’ by Agusto and Co.
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