Skye Bank’s new headquarters in Lagos. The bank was formed from the merger of five institutions in 2006.

Market newcomer Skye Bank hopes to act as Nigeria’s largest lender for telecommunication and housing projects

Skye Bank Plc. is one of Nigeria's newest banks, and also one of its fastest growing. Established in January 2006 by the merger of five banks, the lender's focus on customer service and its successful investing in growth industries led to a jump in profit within its first year of operations.
In the first nine months of 2006, after Prudent Bank, EIB International Bank, Bond Bank, Reliance Bank and Cooperative Bank combined to form Skye, the new entity posted profits of 2.5 billion naira. Skye's management, led by Chief Executive Officer and Managing Director Akinsola Akinfemiwa, was able to more than double that to 5.5 billion naira ($46.75 million) by the end of the same period in 2007.

That remarkable result was made possible by Skye's experienced management team, their hard work and their dedication to offering its customers the innovative products that they need to improve their lives and their financial situations.

“We want Skye Bank to be known as a provider of solutions for clients’ problems,” says Akinfemiwa. “Skye Bank has fresh ideas and prioritizes all its clients. We will bring about practical solutions, which are derived from our experiences and skills in the market.”

Skye is also concentrating on lending in areas that it knows well, that are growing and that offer excellent opportunities for profit. Nigeria's oil industry makes that sector a clear target for investments. Other, less obvious, markets include shipping and real estate.

According to the bank's estimates, Nigeria needs 96 trillion naira in long-term investment in real estate to expand the country's housing stock and improve the quality of the country's homes, said Timothy Oguntayo, General Manager of Investment at the Bank.

“Industry sources estimate that less than 20 percent of Nigeria's population of 140 million live in their own homes, and most Nigerians live in sub-standard accommodation,” he said during an investors' forum in Abuja in January.

That represents a huge opportunity for lenders, and Skye is ahead of its competitors in many respects in this area. For example, the bank recently introduced the first real estate investment trust unit, or REIT, to be listed on the Nigerian Stock Exchange, helping investors benefit from growth throughout the market while at the same time reducing their risk.

The shipping industry is another area Skye has targeted for investment. It was the first bank in Nigeria to set up a department dedicated to the maritime business, and has already made several successful forays into the market.

In January the bank financed the purchase of the Seaway Rover Panama from Peacegate Group, a Nigerian oil-and-gas services company. The ship will be used for offshore maritime and logistics-support activities.

The lender isn't limiting its financing activities to heavy industry and real estate, however. Skye is investing in other areas as well, industries that will help make life easier for millions of regular Nigerians while also spurring economic growth, according to Akinfemiwa.

“We also need to put strong emphasis on the ongoing projects like infrastructures and telecommunications,” he asserts. “We believe that with the empowerment of the middle class of this country, the people would be more assertive and require more from the various sectors.”

The growing middle class is another target for Skye, and the bank has moved quickly to take advantage of that market's opportunities. The bank's deposits and current accounts rose to 269 billion naira on Sept. 30, 2007, up from 125 billion naira on the same date a year earlier. “Nigeria has a fast growing, new middle class, estimated by JPMorgan at 15 to 25 million,” says Oguntayo. “However, consumer lending represents less than one percent of the gross domestic product, compared to 15 percent in South Africa.”

The bank is already working hard to expand within Nigeria, the most populous country in sub-Saharan Africa, but it has set its sights abroad as well, with plans to enter the Namibian and Angolan markets.
The lender has the financial strength to work in these many areas at the same time because of its strong investor base, which actively supports Skye's investments and strategies, Akinfemiwa explains.

Skye has also recently taken measures to further strengthen its finances. In January it launched a 50 billion naira share sale in a hybrid offering that included a rights issue and the sale of shares to the public. The money will be used to boost capital and support expansion, helping the bank become even more competitive.

In the end, though, it all comes down to giving customers what they want and need, according to Akinfemiwa. “The bank's strength comes from looking after all its clients, the big ones and the small ones, and helping them to improve their own lives”, he says.

“We want to reach out to the common people and expand their dreams and allow them to realize their aspirations. There is a unique joy that comes from customers coming back to us, saying they are very satisfied.”