Unfavourable unaudited results: Sell pressure affects Skye, Unity Banks

Sell pressure occasioned by the unfavourable nine-month unaudited results by some banks to shareholders may have taken its toll on some banks.
The trading data of banks on the Nigerian Stock Exchange (NSE) showed on Monday that Skye Bank Plc and Unity Bank lost 25.3 per cent and 24 per cent, respectively, in value in one week.
The data between January 4 and 8 showed that the losses were the highest among the sector equities in the first week of 2016.
Mr Ambrose Omorodion, a capital market analyst, attributed the development to the dumping of the banks’ shares by investors.
Omorodion said that investors were beginning to have a rethink on the stocks of the banks, going by the banks’ nine-month unaudited results.
He explained that for instance, the management of Skye Bank had raised investors’ expectations that the acquisition of Mainstreet Bank would be a game changer for the bank.
Omorodion said the nine months results of Skye Bank indicated otherwise.
“Although Skye Bank recorded a growth of 22 per cent in profit after tax for the nine months ended Sept. 30, 2015, its total expenses jumped by 37 per cent in the period under review,” he said.
Omorodion added that contrary to expectations that the deposits of Skye Bank would be boosted by the integration of Mainstreet Bank, the deposits of Skye Bank declined by 13 per cent.
“Besides, while the bank recorded an increase of 25 per cent in interest income, interest expenses jumped by 42 per cent.
“These indicators are not encouraging and some investors are adopting a wait-and-see attitude, while others are dumping the shares,” he said.
The Central Bank of Nigeria (CBN) in November fined Skye Bank N4 billion for failing to render appropriate returns on accounts of some government institutions and agencies.
However, the bank said the fine imposed by the apex bank was misdirected since it did not conceal any information on the accounts from the central bank.
The bank said a significant portion of the money for which it was penalized belonged to the state-owned energy company, NNPC Pension Funds and the National Assembly Legislative Aides account balances.