Skye Bank To Raise N30Bn

Yemisi Izuora

Skye Bank Plc is about to raise N30 billion  ($151 million) from existing and new investors before the end of the year.

The bank intends to use the fund to strengthen its capital base.

The bank’s chief executive Timothy Oguntayo said it has identified some shareholders who were willing to support the cash call, part of which is meant to help the lender prepare as the country adopts stricter international requirements, Reuters reported.

“With or without changes in the macro (economic) environment, our existing shareholders have shown some interest in the offering,” he said, referring to a weaker currency and lower oil price that have hampered Nigeria’s outlook as an investment destination.

The bank had said in April it planned to raise 50 billion naira.

Shares in Skye Bank, down 21 percent so far this year, ended flat at 2.10 naira.

Last week the bank, which acquired nationalized lender Mainstreet Bank in 2014, reported a 47.4 percent rise in first-half pretax profit to 10.71 billion naira.

It said it had so far this year restructured 65 billion naira in loans, about 30 percent of which were to clients in the oil and gas sector.

Loans grew by 14 percent in the half year to 657 billion naira and it set loan growth guidance of 5 percent this year.

Oguntayo said the central bank was restructuring 27 billion naira of short-term loans Skye made to Nigerian state governments to 20-year maturities, paying a 16 percent coupon. The restructured loans will qualify as liquid assets, he said.

Nigeria’s 36 states have debts of 658 billion naira and one way out of the credit crunch would be for banks to extend the maturity of loans made to them as much as 20 years, one of the state governors has said.

Several states borrowed in the domestic bond market and from banks to fund infrastructure projects. But the price of crude oil, which represents 70 percent of Nigeria’s revenue, has since plunged, leaving the government unable to pay bills or salaries.

Skye Bank also said it was weighing a decision to adopt a holding company structure and retain its subsidiaries or divest them. It expected to complete the process by the second quarter of next year. ($1 = 199.00 naira)

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