Asset Management Company, AMCON has finally transferred full ownership of Mainstreet Bank to Skye Bank.
This moves perfects regulatory clearance by Skye bank as new owner of the acquired financial institution.
And front person of the increased in standing financial establishment, Skye has assured customers and staffers of the acquired bank of good times ahead.
Here are full details as made available to societynowng.com
Skye Bank on Friday took full control of Mainstreet Bank Limited after a completion meeting where Asset Management Corporate of Nigeria (AMCON), divested its interest and transferred full ownership of the Bridge Bank to Skye Bank, having successfully paid 100% of the acquisition value and received regulatory clearance as the new owner.
At a well-attended, but short handover ceremony held at AMCON headquarters in Lagos which had the Directors of Mainstreet Bank Limited and Skye Bank present, AMCON formally handed over ownership and commended Skye Bank for emerging the preferred bidder out of over 29 bidders “in the highly competitive and transparent process that took over a year to complete”. Particularly, Skye Bank was lauded, “for its tenacity and doggedness in pursuing the acquisition with all sense of seriousness and professionalism”.
AMCON also praised the out-going Board and Executive Committee members of Mainstreet Bank for “their dedication and service to Nigeria in steering and piloting the affairs from what it used to be, to profitability”.
Between October 3 and October 31, Skye Bank paid both the initial 20 percent mandatory deposit and completed the 80 percent balance well ahead of the November 3 deadline for the 100% acquisition of Mainstreet Bank which has been described by several analysts and financial commentators as a ground breaking acquisition in Nigeria’s financial sector.
Meanwhile, the GMD/CEO of Skye Bank, Mr. Timothy Oguntayo in company of the Integration Team, while addressing the Executive members and management team of Mainstreet Bank at the bank’s headquarters after the handover by AMCON in Marina assured staff and customers of good times ahead; even as he solicited the co-operation of all in ensuring a seamless transition process.
Analysts have been unanimous in that the acquisition, operationally, is a game-changer for Skye Bank, given possible synergies and the impact on the balance sheet and profitability of the bank, while it would also increase the bank’s market position in the banking industry and at the stock market.
Recent newspaper reports quote analysts as saying that the potential impact will be big on Skye Bank’s reach and asset size. Mainstreet Bank has nine subsidiaries and a large distribution network comprising of 201 branches across 35 out of 36 states in Nigeria and the Federal Capital Territory, Abuja. It equally has nine cash centers and 205 Automated Teller Machines (ATMs).
Skye Bank, with dominant operations in the Southwest, is also banking on Mainstreet Bank to deepen its penetration of the South-East and South-South regions where it is currently less represented. Some 26 percent or 54 branches of Mainstreet Bank’s network are located in the two regions. These two regions also accounted for 28 percent of Mainstreet Bank’s over 1.9 million customers, second only to Lagos with 37 percent.
With smooth and seamless integration, Skye Bank will be able to make valuable in-roads into these two regions without the need to incur huge expenditure, while the acquisition would bring valuable concurrence and synergies from the mutual focus areas of commercial and retail banking of the two entities. Skye Bank focuses on retail and commercial banking which is also the main focus areas of Mainstreet Bank.
The latest audited report and accounts of Mainstreet Bank for the year ended December 31, 2013 showed that retail and commercial banking contributed 78 percent, 36 percent, and 18 percent of total deposits, total loans and profit before tax respectively. Also, Mainstreet Bank’s savings and demand deposits accounted for 21 percent and 43 percent of the deposit mix, which also demonstrated its focus on these two segments. A second generation leader, Mainstreet Bank has a large pool of loyal institutional and corporate customers, which in spite of its status as an AMCON-owned bank, ensures that the bank retained almost its two million customers after the takeover.
Also, Mainstreet Bank Limited has a history of successfully managing agricultural loans, which accounted for 12.6 percent and 16.9 percent of its loan portfolio in 2012 and 2013, second only to ‘general’ sector. Analysts have said Mainstreet Bank’s expertise in managing agric loans made its non-performing loan ratio very negligible at 0.01 per cent, where Skye Bank saw a significant opportunity to improve its expertise in this area, and therefore raise its market share in the agriculture sector. This will position Skye Bank very strategically to partner with and participate in the Federal Government’s short and medium term planned strategic investments and budgetary allocation to the agriculture sector.
Besides driving growth with its inorganic strategy, Skye Bank, organically, has been witnessing a notable upturn in its performance. The bank recorded a pre-tax profit of N12.3 billion on a top-line of N97.13 billion in the third quarter. Key extracts of the interim report and accounts of the bank for the nine-month period ended September 30, 2014 showed modest growths in some performance indices. The pre-tax profit of N12.3 billion represented a quarter-on-quarter growth of 33 percent. With gross earnings of N97.1billion, the bank was able to reduce its interest expense by 15 percent year-on-year to close at N30.3 billion compared with N35.7 billion as at September 2013.