The lull in the oil industry and real estate sector of the nation’s economy has impacted negatively on the operations of Skye Bank Plc. Consequently, the bank is expected to report a decline in profit for the financial year ended December 31, 2015.
In a profit warning notification to the capital market community, the management of Skye Bank Plc said the expected decline in performance is attributable to decision to recognise increased impairment on loans to sectors severely affected by the prevailing economic headwinds which are yet to abate, especially the lull in oil & gas and real estate sectors.
“While this cautious approach has been adopted, we have designed and commenced appropriate remedial processes to salvage the affected assets as soon as possible. Full details of the Group’s financial performance will be disclosed after regulatory approvals of the financial statements. We remain committed to our focus on supporting the growth of the retail and small and medium scale enterprise (SME) sectors amongst others,” the bank said.
Skye Bank explained that in 2015, it made substantial improvements to its risk management framework with a view to ensuring that its risk assets portfolio remain solid and of good quality.
“Our cost containment, internal efficiency and process improvement measures remain on track,” the bank added.
Skye Bank is the fifth financial institution informing investors to expect lower earnings for 2015 due to the challenging operating environment. FCMB Group, FBN Holdings Plc, Diamond Bank Plc, and Ecobank Transnational Incorporated have all notified the capital market community of the lower earnings.
Meanwhile, the Nigerian equities market started the week on a negative note with the Nigerian Stock Exchange (NSE) All-Share Index declining by 1.4 per cent to close at 25,545.10. Similarly, the market capitalisation shed N214.2 billion to close at N8.7 trillion.
The performance was broadly driven by the depreciation in bellwether stocks across sectors including Zenith Bank Plc, Guaranty Trust Bank, Nigerian Breweries Plc and Dangote Cement Plc.
Apart from the NSE Oil & Gas Index, that appreciated by 0.3 per cent, other indices closed negatively. Price depreciation in Dangote Cement Plc, Cement Company of Northern Nigeria Plc, led to a decline of 2.5 per cent in the NSE Industrial Index.