By Omoh Gabriel Business Editor
SKYE Bank emerged strongly from the last consolidation phase not only because of the strength of the legacy banks that combined in the process but also because of the drive of the leading characters of the merger who exhibited so much faith in the Reforms. For instance, at a timed others operated doubtful as to the direction of the exercise and resolve of Professor Chukwuma Soludo to follow through the reforms as announced, the erstwhile Prudent Bank led the way in putting together one of the first set of merger groups. But when it appeared that other members of this initial group were not ready to move at a desirable pace, the bank pulled out and formed the Skye merger group with Eko International bank and in no time achieved the minimum capital base of N25 billion long before the deadline of 31st December 2005.
With this comfortable position, it attracted three others – Reliance, Bond and Co-Operative Banks to form one of the formidable institutions we have today int eh banking sector.
With this same drive, the bank approached the challenging question of post-merger integration. The major challenges revolved around extensive branch network, personal and disparity in technology among the legacy banks. Recall that by the end of 2006, the bank had already reached 185 mark in branch network out of which about 25 were opened during the year.
In order to provide effective wide area network to cover all the branches, Skye Bank adopted the flexcube banking solution, a robust platform it has used to deliver on-line real time services to customers across the entire network. This has made it easier for customers to subsume the identities of their respective legacy banks under the now dominant Skye franchise not only by `brand name’ but also by actual quality of services.
Skye Bank has gone ahead to re-package existing products of the legacy banks and churn out new ones to sustain a culture of aggressive product development embraced by Prudent Bank in its last few years of existence.
Some of the innovative products it currently offers include Skye Card, Valucard, Flexicard, Skye Rainbow Savings, SkyeSalary Express, Skye Support and Skye Lifestyle. Recently it launched the skye Global Account targetted essentially at Nigerians in diaspora, especially United Kingdom. The success of this latest effort, coupled with enlarged capital base have also provided the impetus to explore the flexibility of physical presence in locations outside the country beginning with the West African sub-region.
Other innovative payment and customer service initiatives introduced by Skye Bank includes the Pay-Direct Payment Settlement System in collaboration with Inters witch. It also launched the V-pay Solution in June 2006 under which arrangements has been concluded to issue the international visa brands in this first quarter of 2007. Accordingly it ATMS have been certified to process both local and international visa transactions.
Interestingly the bank now has more than 70 ATM, deployed to complement over-the-counter services just as it is one of the pioneers of 24 hor ATM services in Nigeria.
Skye Banks’ Market Strategy has a strong Retail and Public Sector focusing imprimateur of this could be found on the nature of the products and services. The banks’ strength in delivery efficient payment and collection services to the public sector is well recognized in the market. With one fo the legacy banks having close ties to the Lagos state government, it is not a surprise that the bank plays a dominant role in this market segment.
Perhaps because of the gap identified in its defined segment of the market, the bank recently launched a unique free financial advisory services scheme. It set up a dedicated unit to handle this service which is expected not only to provide the desired impetus to meet customers financial needs but also increase financial literacy.
And still targetting this identified market segment, Skye Bank also initiated what it captioned the `yes campaign’. This is an invitation to the target audience to join hands with the bank in partnership to positively explore a new world of possibilities. By this, the bank has anticipatorily said `yes’ to the demand of customers towards taking their lifestyles and businesses to new heights.
Financial Performance
As noted earlier, 2006 was a very difficult one operationally for most banks in the Nigerian Financial Sector, especially for merger groups composed essentially of small and medium sized legacy banks. This is because for this set of banks, the exercise involved the question of life and death which required that attention be given to it hundred per cent to the virtual neglect of normal operations. For these banks, it was not totally unexpected that the first post consolidation year Annual Report and Accounts would reflect these challenges. Notwithstanding its impressive record of post merger integration, Skye Bank fell into this category. For the bank virtually all aspects of financial performance lagged behind what was projected by directors during the merger process.
For Skye Bank, the final figures are yet to be released and this followed decision of management to change financial year end from March to September. But from Interim figures released to the stock market it was obvious that though the current period’s results showed improvement over the preceding year’s figures, they were largely far from target. One major proxy for volume of business handled during the review period is gross earning. As at 31st March 2006, the bank grossed a total of N9.4 billion from all sources of earning. This is far from N33 billion projected in the scheme document for the period up to 31st May 2006.
Evidently, the bank could not deploy substantial part of its resources to create assets of high earning potential as a result of the reasons given above. Hence earning efficiency was low at our proxy rating below 7.0%. In the same manner cost efficiency was equally low at about 8.5%. With these ratings of financial performance, the bank was able to achieve a net profit postilion of N525 million which though was far away from projected figure of N3.4 billion but was slightly higher N493 million achieved by the stand alone Prudent Bank in 2005. There are however indications from recent interim reports that following the conclusion of initial stages of integration, business volume has picked up tremendously.
FILE NAME: SKYE FEBRUARY 5, 2007
