Skye Bank Plc: Environmental, Social and Governance Report.

Skye Bank is a commercial Bank with international banking license from the CBN. Its primary business focus is in Corporate, Commercial and Retail business segments. The Bank maintains an asset size of over NGN 1 trillion, led by a management team with a clear strategic focus and a well diversified banking experience. The Bank has a nation wide distribution platform. It operates in over 240 business offices across Nigeria with 2,555 employees, 597 ATM’s and 7212 POS.

Skye Bank is an independent banking institution with a broadly diversified shareholding Base, the bank has close to 500,000 shareholders, none owning more than 5% of total Capital.

PERFORMANCE ANALYSIS

Financial Performance
Skye bank’s gross earnings fell from 127.730bn in 2012 to 127,340bn in 2013 representing a decrease of 0.3%; although net operating income grew from 69.845bn to 81.257bn representing a 16% increase. Net interest income grew 39% from 44.502bn to 61.698bn, while non-interest income (net fees,commission and other income) fell 18% from 26.698bn to 22.026bn.

The bank’s profit before tax grew by 4% from 16.510bn to 17.136bn. The profit after tax was 16.023bn in 2013 to 12.644bn in 2012. To arrive at this result, the bank grew its total assets by 4% from N1.073.828 Trillion in 2012 to N1.116.636 Trillion 2013.

Performance Ratios

Skye bank’s interest margin reveal a stable focus on traditional activities of financial intermediation. About 80% of the gross earnings of the bank has been strongly accounted for by interest earnings while a stable 20% is being accounted for by fee-based earnings. Return on capital employed on a trend analysis between 2012 and 2013 fell from 6.24% in 2012 to 5.84% in 2013. Return on equity rose from 12.84% to 13.3% while return on assets grew from 1.30 to 1.43%.
Earning per share increased from N0.96 to N1.20 in 2012 to 2013 respectively.

Liquidity Ratio
Over the years, Skye bank has shown consistent liquidity. In 2011, the bank’s liquidity ration was 43.61%, 2012 was 44.87% and 2013 was 44.88%. Although the liquidity ratios are low, but they are close to the 50% benchmark.
Earning per share increased from N0.96 to N1.20 in 2012 to 2013 respectively.For the Eps of N1.20, the bank paid a dividend of 30kobo in the current year.

From the above analysis, we can deduce that the performance of Skye bank Plc for the year 2013 has been strong.

STRATEGY POSTURE

What Is Strategic Posture?
Strategic posture is an approach company leaders take in applying a business’ strengths to the current and long-term needs of the marketplace. Formulating a strategic posture is part of the broader strategic planning process, when managers collaborate to develop the vision, goals and strategies for a business in the foreseeable future. By recognizing the nature of a strategic posture, you can lead your company more effectively.
Skye banks has identified its strengths,opportunities, weaknesses and threats and have chosen to take up a very strong strategic posture by following these strategic initiatives.

IT Upgrade and Transformation
• Upgrade of the Bank‟s software, ‘Flexcube’, from Version 6.2 to version 12.0,which Will be completed in Q2 2014

• Automation of operational processes to support Information and Communication Technology (ICT) Transformation Project

• Cost Management

• Deployment of stringent control measures to effectively manage operational cost

• Balancing our deposit mix

• Improved Channel Accessibility 8,114 POS terminals and 593 ATM’s have been Deployed with capacity for more.

• Improved IT security and user-friendliness On our internet banking and other related platforms.

Growth

• Tier 1 and Tier 2 Capital Raising Project progressing as planned Deepen the retail & commercial business and access to low cost deposits via selective branch expansion.

• Value Chain Based Solutions: Efficient deployment of e-Solutions to the private Sector across value chains.

Skye bank plc is in a strong strategic posture, she possesses great strategic initiatives and she is also in a commanding role in the banking industry.

CORPORATE GOVERNANCE

The board of Skye bank Plc as at 31 December 2013 was composed of 17 members, eleven of them were non Executive directors including the chairman and two independent Non executive directors while the other six were Executive directors including the group managing director/ Chief executive officer.The number of directors and the ratio of executive to non executives are adequate for the effective functioning of the board.

The board is also working towards the attainment of gender balance advised by the regulatory authority as there are presently fourteen male and only three female members. The age range of the board is between 44 years and 71 years which ensures a healthy mix of experience and perspective.

Skye bank Plc adopts a Marionette management of corporate governance. Here, the board of directors controls all strategic planning, while the top management handles operational decisions. There is usually minimal involvement by shareholders. This style, which may also be called Influenced Board, suits mature companies whose main focus is on continuing to yield high dividends.

The governance practice of the bank includes:

•  An annual evaluation of the performance of the board conducted by an independent consultant; this aspect covers all aspects of the boards structure and composition,committees, responsibilities, process and relationships, as well as performance of the board as a group, committees and as individual members

• A formal, transparent and rigorous board appointment process designed to ensure both continuity and orderly change on the board.

• The board has in place a formal orientation program for newly appointed directors to familiarize them with bank’s operations, strategic objectives, business environments and their fiduciary and other responsibilities.

• The maximum tenure of non executive directors is 12 years while independent non- executive directors have 2 terms of 4 years each, and executive directors have a maximum of 2 terms of 4 years each.

• The bank has a continuing professional education and development program to enhance their knowledge and competence, particularly in the area of risk, financial, governance and compliance oversight.

• The executive directors do not determine their own remuneration.

• The board has latitude to hire independent consultants to advise it on issues that require their opinion at the bank’s expense.

•  The board maintains a culture of compliance with rules and regulations