Managing Director of Skye Bank Plc, Timothy Oguntayo has said banks are reluctant to fund fuel import because of the absence of a clear-cut policy statement from the Federal Government on the subsector.
According to him, banks are being cautious on their loan growth to oil marketers because no lender would want to incur losses or increase the position of its non-performing loans.
Oguntayo who spoke at the weekend as part of pre-Annual General Meeting (AGM) activities of the bank which will holds today in Lagos, said that government’s reluctance in paying subsidy claims to petrol marketers has affected some of its loans in the downstream oil and gas sector.
On the bank’s performance in the 2014 financial year and those of its subsidiaries, he said the bank did not report any losses from such subsidiaries.
He said the bank has N5 billion in exposures to the power sector which is being serviced because the loans were syndicated.
Oguntayo said Skye Bank has engaged consultants to review the viability or otherwise of subsidiaries of the Mainstreet Bank Limited, which it acquired.
He said the bank is discussing with the consultants to determine whether to sell the Mainstreet Bank subsidiaries, or retain them. “We want to finish that next June, ahead of time. Are the subsidiaries profitable? If not, we may sell them,” he said.
Some of the Mainstreet Bank subsidiaries include: Mainstreet Bank Insurance Brokers Limited, Mainstreet Bank Securities Brokers Limited, Mainstreet Bank Microfinance Bank Limited and Mainstreet Bank Trustees & Asset Management Company Limited.
Others are: Mainstreet Bank Registrars, Mainstreet Bank Capital Markets, Mainstreet Bank Estate Company Limited, Mainstreet Bank Bureau De Change Limited and ANP International Finance Limited.
Oguntayo said Mainstreet bank was acquired to complement Skye Bank’s organic effort, noting that the bank took a strategic decision to take part in the bidding process for the acquisition of Mainstreet Bank Limited, being one of the three bridged banks owned by the Asset Management Corporation of Nigeria (AMCON), made available for sale to interested bidders.
Skye Bank, he said, paid over N126 billion for the Mainstreet acquisition, which he believes will enable it to expand its market share, improve brand awareness, size and industry positioning.
He said Skye Bank’s expansion bid to the South South and South East will be served by the acquisition of Mainstreet, which has many branches in those geo political zones.
Skye Bank also plans to raise additional capital through the Nigeria Stock Exchange (NSE) to boost its operations.
The bank CEO also said the bank’s exposure to the real estate segment is being studied, adding that the lender has not ‘really’ lost any money to this segment of the economy.
He attributed some of the provisions done in that segment of the market to the Central Bank of Nigeria (CBN) prudential guidelines requiring that loans be provised, at certain stage, if it is non-performing.
Oguntayo said the bank is not negatively affected by the recent harmonisation of the Cash Reserve Ratio (CRR) at 31 per cent for both private and public sector deposits.
“We have a public sector deposits constituting 13 per cent of our deposits while private sector deposits is 87 per cent of our deposits,” he said.
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