The Managing Director of Skye Bank Plc, Mr Timothy Oguntayo has said that the reason banks are cautious on their loan growth to petroleum marketers is because no lender would want to incur losses or increase the position of its non-performing loans.
Oguntayo spoke at the weekend ahead of Skye Bank’s Annual General Meeting (AGM) activities of the bank which will holds today in Lagos.
According to him, banks are reluctant to fund fuel import because of the absence of a clear-cut policy statement from the Federal Government on the subsector.
He 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.
Speaking 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.
On the acquisition of Mainstreet Bank, he said that Mainstreet Bank was acquired to complement Skye Bank’s organic effort, Skye Bank has engaged consultants to review the viability or otherwise of subsidiaries of the Mainstreet Bank Limited, which it acquired.
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. It is on record that Mainstreet has a total of 10 subsidiaries.
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
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