Post on 11-Apr-2018
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
1
Report of the Audit Commitee
April 21, 2016
For the year ended 31 December 2015
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
2
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
Statement of Directors’ Responsibilities In relation to the Consolidated Financial Statements
Dr Tunde Ayeni Timothy Oguntayo
Chairman Group Managing Director
21 April 2016 21 April 2016
The Companies and Allied Matters Act and the Banks and Other Financial Institutions Act, require the directors to prepare nancial
statements for each nancial year that gives a true and fair view of the state of nancial affairs of the Company and Group at the end of
the year and of its prot or loss. The responsibilities include ensuring that the Company and Group;
Keep proper accounting records that disclose, with reasonable accuracy, the nancial position of the Company and Group and
comply with the requirements of the Companies and Allied Matters Act and the Banks and Other Financial Institutions Act;
Establish adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and
Prepare nancial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates
that are consistently applied.
The Directors accept responsibility for the nancial statements, which have been prepared using appropriate accounting policies
supported by reasonable and prudent judgments and estimates, in conformity with the International Financial Reporting Standard (IFRS)
and the requirements of the Companies and Allied Matters Act; CAP C20 Laws of the Federation of Nigeria 2004 and the Financial
Reporting Council of Nigeria No.6, 2011.
The directors are of the opinion that the consolidated nancial statements give a true and fair view of the state of the nancial affairs of
the Bank and Group and of the nancial performance and cash-ows for the period. The directors further accept responsibility for the
maintenance of accounting records that may be relied upon in the preparation of nancial statements, as well as adequate systems of
internal nancial control.
Nothing has come to the directors to indicate that the Bank and Group will not remain a going concern for at least twelve months from
the date of this statement.
SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:
For the year ended 31 December 2015
Statement of Comprehensive Income(All amounts in millions of Naira unless otherwise stated)
Interest income
Interest expense
Net interest income
Loan impairment charges
Fee and commission income
Fee and commission expense
Net fee and commission income
Net trading income
Other operating income
Bargain purchase
Impairment charge on other financial assets
Net operating income
Employee benefit and compensation cost
Administration and general expenses
Depreciation and amortisation
(Loss)/profit before tax
Taxation
(Loss)/profit for the year
(Loss)/profit attributable to:
Owners of the Bank
Non-controlling interests
Other comprehensive income:
Items that may be subsequently reclassified to
profit or loss
Net change in fair value on available-for-sale financial
assets
Currency translation differences arising from foreign
operations
Items that will not be reclassified subsequently to
profit or loss
Remeasurement of post employment benefit obligation
Other comprehensive income for the year, net of
tax
Total comprehensive (loss)/income for the year
Total comprehensive (loss)/income attributable
to:
Owners of the bank
Non-controlling interests
Earnings per share for profit attributable to
owners of the Bank
Basic/diluted (loss)/earnings per share (kobo):
The accompanying notes on pages to form an integral part of these nancial statements40 159
Notes
7
8
9
10
11
12
13
14
15
16
17
38
18
42 467 2,360 467 2,360
31 December 31 December 31 December 31 December
2015 2014 2015 2014
127,908 107,847 125,559 107,081
(76,993) (44,572) (78,085) (44,495)
50,915 63,275 47,474 62,586
(27,536) (18,992) (28,706) (19,706)
23,379 44,283 18,768 42,880
16,862 14,914 16,131 14,532
(1,801) (1,884) (1,785) (1,855)
15,061 13,030 14,346 12,677
13,457 9,252 12,755 9,226
5,651 4,729 5,066 4,607
- 8,976 - -
(7,145) (1,959) (6,251) (1,959)
50,403 78,311 44,684 67,431
(38,229) (19,676) (37,122) (19,481)
(40,874) (34,795) (38,684) (34,561)
(8,946) (4,390) (8,745) (4,124)
(37,646) 19,450 (39,867) 9,265
(3,080) (733) (2,556) (636)
(40,726) 18,717 (42,423) 8,629
(40,804) 18,668 (42,423) 8,629
78 49 - -
(40,726) 18,717 (42,423) 8,629
(129) 2,493 134 2,493
3,339 (698) - -
3,677 4,155 601 4,853
(37,049) 22,872 (41,822) 13,482
(37,212) 22,823 (41,822) 13,482
163 49 - -
(37,049) 22,872 (41,822) 13,482
(299) 137 (306) 62
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
4
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
5
(All amounts in millions of Naira unless otherwise stated)
Assets Notes
Cash and balances with central banks 19
Due from banks and other financial institutions 20
Financial assets held for trading 21
Derivative financial assets 36
Loans and advances to customers 22
Investment securities:
- Available for sale investments 23
- Held to maturity investments 24
- Loans and receivables investments 25
Assets pledged as collateral 26
Prepayment and other assets 27
Trading properties 28
Investment properties 29
Investment in subsidiaries 30
Property, plant and equipment 31
Intangible assets 32
Deferred tax assets 40
Assets classified as held for sale 33
Total assets
Liabilities
Due to other financial institutions 34
Deposits from customers 35
Derivative financial liabilities 36
Borrowings from local and foreign institutions 37
Current tax liability 38
Accruals and other liabilities 39
Deferred tax liability 40
Liabilities on investment contracts 41
Retirement benefit obligation 42
Total liabilities
Equity
Share capital 43
Share premium 43
Accumulated (loss)/Retained earnings 43
Other reserves 43
Non-controlling interest 43
Total equity
Total equity and liabilities
The accompanying notes on pages to form an integral part of these nancial statements40 159
The financial statements were approved and authorised for issue by the Board of Directors on 21 April 2016 and signed on its
behalf by:
Dr. Olatunde Ayeni
Chairman
FRC No: 2013/IODN/00000001738
Mr Timothy Oguntayo
Group Managing Director / CEO
FRC No: 2013/ICAN/00000001740
150 150 150 150
31 December 31 December 31 December 31 December
2015 2014 2015 2014
205,147 300,644 202,725 251,805
37,031 72,978 35,617 56,114
344 18,283 131 1,384
178 - - -
704,896 645,774 700,403 598,197
14,875 8,414 9,812 2,718
50,756 125,101 43,031 72,687
34,949 36,058 33,919 18,387
68,701 90,170 68,701 34,066
9,973 15,069 15,443 12,619
3,859 3,866 - -
2,008 1,995 - -
- - 6,693 129,607
62,973 65,431 61,813 29,937
3,076 3,871 3,066 1,962
481 463 - -
1,199,247 1,388,117 1,181,354 1,209,483
1,199,397 1,388,267 1,181,504 1,209,633
33,110 51,816 31,766 12,498
753,145 952,302 754,882 818,457
335 288 335 288
216,448 131,279 216,448 124,967
2,716 5,230 1,515 1,278
78,588 97,966 74,141 112,209
3,367 1,225 3,177 1,084
- 26 - -
7,505 6,903 7,491 6,899
1,095,214 1,247,035 1,089,755 1,077,680
6,940 6,609 6,940 6,609
65,548 65,548 65,548 65,548
(6,825) 42,662 (17,134) 32,225
37,593 25,649 36,395 27,571
103,256 140,468 91,749 131,953
927 764 - -
104,183 141,232 91,749 131,953
1,199,397 1,388,267 1,181,504 1,209,633
Group Bank
FRC No: 2016/ICAN/00000014239
Mr Pius Olaoye
Chief Financial O cer
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
Statement of Financial Position
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
Sh
are
Sh
are
Cap
ital
Sta
tuto
ryS
MEEIS
Reg
ula
tory
AFS
Fair
valu
eTra
nsla
tion
Tre
asu
ryR
eta
ined
No
n-
co
ntr
oll
ing
To
tal
cap
ital
pre
miu
mre
serv
ere
serv
ere
serv
ere
serv
ere
serv
ere
serv
ere
serv
eearn
ing
sTo
tal
inte
rest
Eq
uit
y
Bala
nce
at
1Jan
uary
20
15
Loss
for
the
year
Rem
easure
ment
ofpost
em
plo
ym
ent
benefit
obligation
Tra
nsla
tion
reserv
eChanges
infa
irvalu
eofAFS
financia
lin
str
um
ents
To
tal
oth
er
com
pre
hen
siv
e
incom
e
To
tal
com
pre
hen
siv
e
incom
e
Tra
nsacti
on
sw
ith
ow
ners
Bonus
share
sTra
nsfe
rfo
rth
eyear
To
tal
tran
sacti
on
sw
ith
ow
ners
Bala
nce
at
31
Decem
ber
20
15
6,6
09 - - - - - -
331 -
33
1
6,9
40
65
,54
8 - - - - - - - - -
65
,54
8
7,5
03 - - - - - - - - -
7,5
03
15
,82
2 - - - - - - -136
13
6
15
,95
8
1,8
54 - - - - - - - - -
1,8
54
23 - - - - - - -
8,6
83
8,6
83
8,7
06
2,4
93 - -
(129)
(1
29
)
(1
29
) - - -
2,3
64
(7
04
) - -3,2
54 -
3,2
54
3,2
54 - - -
2,5
50
(1
,34
2) - - - - - - - - -
(1
,34
2)
42
,66
2
(40,8
04)
467 - -
46
7
(4
0,3
37
)
(331)
(8,8
19)
(9
,15
0)
(6
,82
5)
14
0,4
68
(40,8
04)
467
3,2
54
(129)
3,5
92
(3
7,2
12
) - - -
10
3,2
56
76
4
78 -
85 -
85
16
3 - - -
92
7
14
1,2
32
(40,7
26)
467
3,3
39
(129)
3,6
77
(3
7,0
49
) - - -
10
4,1
83
Att
rib
uta
ble
toeq
uit
yh
old
ers
of
the
pare
nt
Oth
er
co
mp
reh
en
siv
ein
co
me,
net
of
tax
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
Gro
up S
tate
ment of C
hanges
in E
quity
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
6
Sh
are
Sh
are
Cap
ital
Sta
tuto
ryS
MEEIS
Reg
ula
tory
AFS
Fair
valu
eTra
nsla
tion
Tre
asu
ryR
eta
ined
No
n-
co
ntr
oll
ing
To
tal
cap
ital
pre
miu
mre
serv
ere
serv
ere
serv
ere
serv
ere
serv
ere
serv
ere
serv
eearn
ing
sTo
tal
inte
rest
Eq
uit
y
Bala
nce
at
1Jan
uary
20
14
6,6
09
65
,54
87
,50
31
4,4
24
1,8
54
7,0
13
-(6
)(2
,12
9)
19
,73
71
20
,55
38
48
12
1,4
01
Pro
fit
for
the
year
--
--
--
--
18,6
68
18,6
68
49
18,7
17
Rem
easure
ment
ofpost
em
plo
ym
ent
benefit
obligation
--
--
--
--
-2,3
60
2,3
60
-2,3
60
Tra
nsla
tion
reserv
e-
--
--
--
(698)
--
(698)
-(6
98)
Changes
infa
irvalu
eofAFS
financia
lin
str
um
ents
--
--
--
2,4
93
--
-2,4
93
-2,4
93
To
tal
oth
er
com
pre
hen
siv
e
incom
e/
(lo
ss)
--
--
--
2,4
93
(6
98
)-
2,3
60
4,1
55
-4
,15
5
To
tal
oth
er
com
pre
hen
siv
e
incom
e/
(lo
ss)
--
--
--
2,4
93
(6
98
)-
21
,02
82
2,8
23
49
22
,87
2
Tra
nsacti
on
sw
ith
ow
ners
Adju
stm
ent
toN
CI
--
--
--
--
271
271
(271)
-
Tra
nsfe
rfo
rth
eyear
--
-1,3
98
-(6
,990)
-5,5
92
--
-
Div
idends
for
equity
hold
ers
--
--
--
--
-(3
,966)
(3,9
66)
-(3
,966)
Non-c
ontr
ollin
gin
tere
st
ari
sin
g
on
busin
ess
com
bin
ation
--
--
--
--
--
-138
138
Dis
posaloftr
easury
share
s-
--
--
--
-787
-787
-787
To
tal
tran
sacti
on
sw
ith
Ow
ners
--
-1
,39
8-
(6
,99
0)
--
78
71
,89
7(2
,90
8)
(1
33
)(3
,04
1)
Bala
nce
at
31
Decem
ber
20
14
6,6
09
65
,54
87
,50
31
5,8
22
1,8
54
23
2,4
93
(7
04
)(1
,34
2)
42
,66
21
40
,46
87
64
14
1,2
32
Att
rib
uta
ble
toeq
uit
yh
old
ers
of
the
pare
nt
Oth
er
co
mp
reh
en
siv
ein
co
me,
net
of
tax
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
Gro
up S
tate
ment of C
hange
s in
Equity
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
7
Sh
are
Sh
are
Cap
ital
Sta
tuto
ryS
MEEIS
Reg
ula
tory
AFS
Fair
valu
eR
eta
ined
cap
ital
pre
miu
mre
serv
ere
serv
ere
serv
ere
serv
ere
serv
eearn
ing
sTota
l
Bala
nce
at
1Jan
uary
20
15
6,6
09
65
,54
87
,50
31
5,7
21
1,8
54
-2
,49
33
2,2
25
13
1,9
53
Loss
for
the
year
--
--
--
-(4
2,4
23)
(42,4
23)
Oth
er
com
pre
hen
siv
ein
co
me/
(lo
ss),
net
of
tax
Rem
easure
ment
ofpost
em
plo
ym
ent
benefit
obligation
--
--
--
-467
467
Net
changes
infa
irvalu
eofAFS
financia
l
instr
um
ents
--
--
--
134
-134
Tota
loth
er
com
pre
hen
siv
e
incom
e/
(lo
ss)
--
--
--
134
467
601
Tota
lcom
pre
hen
siv
elo
ss
--
--
--
13
4(4
1,9
56
)(4
1,8
22
)
Tra
nsacti
on
sw
ith
ow
ners
Tra
nsfe
rsfr
om
reserv
es
--
--
-8,6
90
-(8
,690)
-Bonus
share
s331
--
--
--
(331)
-D
ivid
ends
for
equity
hold
ers
--
--
--
--
-Barg
ain
purc
hase
--
--
--
-1,6
18
1,6
18
Tota
ltr
an
sacti
on
sw
ith
Ow
ners
33
1-
--
-8
,69
0-
(7
,40
3)
1,6
18
Bala
nce
at
31
Decem
ber
20
15
6,9
40
65
,54
87
,50
31
5,7
21
1,8
54
8,6
90
2,6
27
(1
7,1
34
)9
1,7
49
Att
rib
uta
ble
toeq
uit
yh
old
ers
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
Bank
Sta
tem
ent of C
hanges
in E
quity
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
8
Sh
are
Sh
are
Cap
ital
Sta
tuto
ryS
MEEIS
Reg
ula
tory
AFS
Fair
valu
eR
eta
ined
cap
ital
pre
miu
mre
serv
ere
serv
ere
serv
ere
serv
ere
serv
eearn
ing
sTota
l
Bala
nce
at
1Jan
uary
20
14
6,6
09
65
,54
87
,50
31
4,4
74
1,8
54
7,0
13
-1
9,4
36
12
2,4
37
Pro
fit
for
the
year
--
--
--
-8,6
29
8,6
29
Oth
er
com
pre
hen
siv
ein
co
me,
net
of
tax
Rem
easure
ment
ofpost
em
plo
ym
ent
benefit
obligation
--
--
--
-2,3
60
2,3
60
Net
changes
infa
irvalu
eofAFS
financia
l
instr
um
ents
--
--
--
2,4
93
-2,4
93
Tota
loth
er
com
pre
hen
siv
ein
com
e-
--
--
-2,4
93
2,3
60
4,8
53
Tota
lcom
pre
hen
siv
ein
com
e-
--
--
-2
,49
31
0,9
89
13
,48
2
Tra
nsacti
on
sw
ith
ow
ners
Div
idends
for
equity
hold
ers
--
--
--
-(3
,966)
(3,9
66)
Tra
nsfe
rfo
rth
eyear
--
-1,2
47
-(7
,013)
-5,7
66
-
Tota
ltr
an
sacti
on
sw
ith
Ow
ners
--
-1
,24
7-
(7
,01
3)
-1
,80
0(3
,96
6)
Bala
nce
at
31
Decem
ber
20
14
6,6
09
65
,54
87
,50
31
5,7
21
1,8
54
-2
,49
33
2,2
25
13
1,9
53
Att
rib
uta
ble
toeq
uit
yh
old
ers
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
Bank
Sta
tem
ent of C
hanges
in E
quity
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
9
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
10
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
Statement of Cashflows
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Operating activities
Net cash used in operating activities (268,997) (77,491) (310,467) (68,482)
Investing activities
Acquisition of investment securities (34,098) (30,129) (34,002) (39,481)
Interest received on investment securities 27,926 28,061 26,356 27,976
Dividend received 317 18 205 18
Acquisition of property and equipment (7,438) (6,175) (7,188) (5,968)
Acquisition of investment in subsidiaries - - - (126,575)
Proceeds from the sale of property and
equipment
872 2,341 857 2,342
Acquisition of intangible assets (1,091) (209) (1,086) (190)
Net cash effect of acquired subsidiary - (103,147) 66,114 -
Proceeds from disposal of assets held for sale - 67 - 67
Proceeds from disposed and matured investment
securities
142,072 136,884 142,071 136,884
Net cash generated from/(used in) investing
activities
128,560 27,711 193,327 (4,927)
Cash flows from financing activities
Interest paid on interest bearing borrowings (6,509) (6,179) (6,509) (6,180)
Proceeds from interest bearing borrowings 158,124 116,088 158,124 116,088
Repayment of interest bearing borrowings (68,496) (128,929) (68,496) (128,929)
Dividends paid to owners - (3,966) - (3,966)
Net cash provided by/(used in) financing
activities
83,119 (22,986) 83,119 (22,987)
Net decrease in cash and cash equivalents (57,318) (72,766) (34,021) (96,396)
Cash and cash equivalents at beginning of year 135,440 205,601 108,306 202,186
Effect of exchange rate fluctuations on cash held 8,348 2,605 8,349 2,516
Net decrease in cash and cash equivalents (57,318) (72,766) (34,021) (96,396)
Cash and cash equivalents at
31 December
Note
44
19.1 86,470 135,440 82,634 108,306
Group Bank
(All amounts in millions of Naira unless otherwise stated)
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1
2
2.1
2.2
2.2.1
a)
(i)
General information
Summary of signicant accounting policies
Statement of compliance
The consolidated and separate nancial statements of the Bank and the Group for the year ended 31 December 2015have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by theInternational Accounting Standards Board (IASB), and the interpretations of these standards, issued by theInternational Financial Reporting Interpretations Committee (IFRIC).
Basis of preparation
Changes in accounting policy and disclosures
The accompanying nancial statements comprise the nancial statements of Skye bank Plc. (referred to as the"Bank" or "the Parent") and its subsidiaries (referred to together as "the Group"). The Bank is a companyincorporated in Nigeria under the Companies and Allied Matters Act CAP C20 LFN 2004. The address of the Bank’sregistered ofce is 3 Akin Adesola Street, Victoria Island, Lagos. These consolidated and separate nancialstatements for the year ended 31 December 2015, are prepared for the Group and the Bank respectively. The Bankand the Group are primarily involved in wholesale, corporate and retail banking and mortgage nancing.
These nancial statements were authorised for issue by the Board of Directors on 21 April 2016.
The principal accounting policies adopted in the preparation of these consolidated and separate nancial statementsare set out below. These policies are applicable to both the Bank and Group nancial statements and have beenconsistently applied to all the years presented, unless otherwise stated.
These nancial statements comprise the statement of comprehensive income prepared as a single statement, thestatement of nancial position, the statement of changes in equity, the statement of cash ow and the notes.
These nancial statements have been prepared in accordance with the going concern principle under the historicalcost convention, as modied by the following:
(i) available-for-sale nancial asset, nancial assets and liabilities (including derivative instruments), certain classeso nvestment property - measured at fair value and
(ii) assets held for sale - measured at fair value less cost of disposal.
The preparation of nancial statements in conformity with IFRS requires the use of certain critical accountingestimates. It also requires management to exercise its judgment in the process of applying the Group’s accountingpolicies. Changes in assumptions may have a signicant impact on the nancial statements in the period theassumptions changed. Management believes that the underlying assumptions are appropriate and that the Group’snancial statements therefore present the nancial position and results fairly. The areas involving a higher degree ofjudgment or complexity, or areas where assumptions and estimates are signicant to the consolidated nancialstatements, are disclosed in Note 6.
The Group has applied the following standards and amendments for the rst time for their annual reporting periodcommencing 1 January 2015:
New standards, amendments and interpretations adopted by the Group
(i) Annual Improvements to IFRSs – 2010-2012 Cycle and 2011 – 2013(ii) Dened Benet Plans: Employee Contributions – Amendments to IAS 19
The adoption of the improvements made in the 2012-2012 Cycle has required additional disclosures in our segmentnote. Other than that, the adoption of these amendments did not have any impact on the current period or any priorperiod and is not likely to affect future periods.
Annual Improvements 2010-2012 Cycle
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
(ii)
b)
(i) IFRS 9, 'Financial instruments'
New standards and interpretations not yet adopted
IFRS 9 addresses the classication, measurement and derecognition of nancial assets and nancial liabilities andintroduces new rules for hedge accounting. In July 2014, the IASB made further changes to the classication andmeasurement rules and also introduced a new impairment model. These latest amendments now complete the newnancial instruments standard. The standard is effective for annual periods beginning 1 January 2018.
Amendments to IAS 19 Dened Benet Plans: Employee Contributions
IAS 24 Related Party Disclosures
The amendment is applied retrospectively and claries that a management entity (an entity that provides keymanagement personnel services) is a related party subject to the related party disclosures. In addition, an entity thatuses a management entity is required to disclose the expenses incurred for management services. This amendmentis not relevant for the Group as it does not receive any management services from other entities.
IAS 19 requires an entity to consider contributions from employees or third parties when accounting for denedbenet plans. Where the contributions are linked to service, they should be attributed to periods of service as anegative benet. These amendments clarify that, if the amount of the contributions is independent of the number ofyears of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the periodin which the service is rendered, instead of allocating the contributions to the periods of service. This amendment iseffective for annual periods beginning on or after 1 July 2014. This amendment is not relevant to the Group, sincenone of the entities within the Group has dened benet plans with contributions from employees or third parties.
With the exception of the improvement relating to IFRS 2 Share-based Payment applied to share-based paymenttransactions with a grant date on or after 1 July 2014, all other improvements are effective for accounting periodsbeginning on or after 1 July 2014. The Group has applied these improvements for the rst time in these consolidatednancial statements. They include:
IFRS 8 Operating Segments
The amendments are applied retrospectively and clarify that:• An entity must disclose the judgements made by management in applying the aggregation criteria in paragraph 12of IFRS 8, including a brief description of operating segments that have been aggregatedand the economic characteristics (e.g., sales and gross margins) used to assess whether the segments are ‘similar’• The reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reportedto the chief operating decision maker, similar to the required disclosure for segment liabilitiesThe Group has not applied the aggregation criteria in IFRS 8.12. The Group has presented the reconciliation ofsegment assets to total assets in previous periods and continues to disclose the same in Note 45 in this period’snancial statements as the reconciliation is reported to the chief operating decision maker for the purpose of decisionmaking.
IFRS 3 Business Combinations
The amendment is applied prospectively and claries that all contingent consideration arrangements classied asliabilities (or assets) arising from a business combination should be subsequently measured at fair value throughprot or loss whether or not they fall within the scope of IAS 39. This is consistent with the Group’s currentaccounting policy and, thus, this amendment did not impact the Group’s accounting policy.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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(ii)
(iii)
2.3
(a)
(b)
The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contractsfor goods and services and IAS 11 which covers construction contracts. The new standard is based on the principlethat revenue is recognised when control of a good or service transfers to a customer – so the notion of controlreplaces the existing notion of risks and rewards. The standard permits a modied retrospective approach for theadoption. Under this approach entities will recognise transitional adjustments in retained earnings on the date ofinitial application (e.g. 1 January 2018), i.e. without restating the comparative period. They will only need to applythe new rules to contracts that are not completed as of the date of initial application. The standard is effective forannual periods beginning 1 January 2018.
In addition, the IASB has indicated that it will issue a new standard on accounting for leases. Under the proposals,lessees would be required to recognise assets and liabilities arising from both operating and nance leases on thebalance sheet. The standard is effective for annual periods beginning 1 January 2019. The Group is yet to assess theimpact of this standard.
In addition, the IASB also plans to issue a new standard on insurance contracts. The Group will consider the nancialimpacts of these new standards as they are nalised.
There are no other standards that are not yet effective and that would be expected to have a material impact on theentity in the current or future reporting periods and on foreseeable future transactions.
Items included in the consolidated nancial statements of each of the Group's entities are measured using thecurrency of the primary economic environment in which the entity operates (the “functional currency”). Theconsolidated nancial statements are presented in Nigerian Naira (“N”), which is the Group’s presentation currency.
Transactions and balances
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases
Foreign currency translation
Functional and presentation currency
Changes in the fair value of monetary securities denominated in foreign currency classied as available for sale areanalysed between translation differences resulting from changes in the amortised cost of the security and otherchanges in the carrying amount of the security. Translation differences related to changes in amortised cost arerecognised in prot or loss, and other changes in carrying amount are recognised in other comprehensive income.
Foreign currency transactions, that is transactions denominated or that require settlement in a foreign currency, aretranslated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetaryitems denominated in foreign currency are translated using the closing rate as at the reporting date. Non-monetaryitems measured at historical cost denominated in a foreign currency are translated with the exchange rate as at thedate o nitial recognition; non-monetary items in a foreign currency that are measured at fair value are translatedusing the exchange rates at the date when the fair value was determined.
Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the yearend translation of monetary assets and liabilities denominated in foreign currencies are recognised in the incomestatement, except when deferred in other comprehensive income as qualifying cash ow hedging instruments andqualifying net investment hedging instruments.
All foreign exchange gains and losses recognised in the income statement are presented net in the IncomeStatement. Foreign exchange gains and losses on other comprehensive income items are presented in othercomprehensive income within the corresponding item.
Except where indicated, nancial information presented in Naira has been rounded to the nearest million.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
(c)
2.4
Subsidiaries
The results and nancial position of all the Group entities (none of which has the currency of a hyper-inationaryeconomy) that have a functional currency different from the presentation currency are translated into thepresentation currency as follows:
• assets and liabilities for each statement of nancial position presented are translated at the closing rate at thedate of that statement of nancial position;• income and expenses for each income statement are translated at average exchange rates (unless this average isnot a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in whichcase income and expenses are translated at the dates of the transactions); and• all resulting exchange differences are recognised in other comprehensive income.
Exchange differences arising from the above process are reported in shareholders' equity as 'Foreign currencytranslation reserve'.
Group companies (foreign operations)
Basis of consolidation
The nancial statements of the subsidiaries used to prepare the consolidated nancial statements were prepared asof the parent company’s reporting date. The consolidation principles are unchanged as against the comparativeperiod.
The Group applies the acquisition method to account for business combinations. The consideration transferred for theacquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners ofthe acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value ofany asset or liability resulting from a contingent consideration arrangement. Identiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at theacquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisitionbasis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts ofacquiree’s identiable net assets. Investment in subsidiaries are reported at cost less impairment (if any) in theseparate nancial statements of the Bank.
Acquisition-related costs are expensed as incurred. If the business combination is achieved in stages, the acquisitiondate carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at theacquisition date; any gains or losses arising from such re-measurement are recognised in prot or loss.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls anentity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and hasthe ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the dateon which control is transferred to the group. They are deconsolidated from the date that control ceases.
Translation differences on non-monetary nancial assets and liabilities such as equities held at fair value throughprot or loss are recognised in prot or loss as part of the fair value gain or loss. Translation differences on non-monetary nancial assets measured at fair value, such as equities classied as available for sale, are included inother comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and ofborrowings and other currency instruments designated as hedges of such investments, are taken to 'Othercomprehensive income'. When a foreign operation is disposed of, or partially disposed of, such exchange differencesare recognised in the consolidated income statement as part of the gain or loss on sale. Goodwill and fair valueadjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity andtranslated at the closing rate.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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2.5 Current and deferred income tax
Current income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement,except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In thiscase, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Business combinations in which all of the combining entities or businesses are ultimately controlled by the sameparty or parties both before and after the business combination (and where that control is not transitory) are referredto as common control transactions. The accounting policy for the acquiring entity would be to account for thetransaction at book values in its consolidated nancial statements. The book values of the acquired entity are theconsolidated book values as reected in the group annual nancial statements of the selling entity. The excess of thecost of the transaction over the acquirer’s proportionate share of the net asset value acquired in common controltransactions, will be allocated to the existing business combination reserve in equity. Where comparative periods arepresented, the nancial statements and nancial information are not restated. Accounting policies of the subsidiarieshave been changed were necessary to reect the accounting policies of the group.
Associates are all entities over which the Group has signicant inuence but not control, generally accompanying ashareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using theequity method of accounting. Under the equity method, the investment is initially recognised at cost, and thecarrying amount is increased or decreased to recognise the investor's share of the prot/loss and othercomprehensive income of the investee after the date of acquisition.
Changes in ownership interests in subsidiaries without change of control
Inter-company transactions, balances and unrealised gains on transactions between Group companies areeliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have beenadjusted to conform with the Group’s accounting policies.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability isrecognised in accordance with IAS 39 either in prot or loss or as a change to other comprehensive income.Contingent consideration that is classied as equity is not re-measured, and its subsequent settlement is accountedfor within equity.
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the datewhen control is lost, with the change in carrying amount recognised in prot or loss. The fair value is the initialcarrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint ventureor nancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of thatentity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean thatamounts previously recognised in other comprehensive income are reclassied to prot or loss.
The current income tax charge is calculated on the basis of the applicable tax laws in the respective jurisdiction andit consists of Company Income Tax, Education Tax and NITDEF Tax. Company Income Tax is assessed at 30%statutory rate of total prot, Education Tax is computed as 2% of assessable prot while NITDEF tax is a 1% levy onProt Before Tax of the Bank. The Group periodically evaluates positions taken in tax returns; ensuring informationdisclosed are in agreement with the underlying tax liability which has been adequately provided for in the nancialstatements.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equitytransactions – that is, as transactions with the owners in their capacity as owners. The difference between fair valueof any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary isrecorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Associates
Common control transactions
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
Deferred income tax
2.6 Financial assets and liabilities
2.6.1 Financial assets
a. Financial assets at fair value through prot or loss
i
ii
Deferred income tax assets are recognised only to the extent that it is probable that future taxable prot will beavailable against which the temporary differences can be utilised. Deferred income tax liabilities are provided ontaxable temporary differences arising from investments in subsidiaries, associates and joint arrangements, except fordeferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Groupand it is probable that the temporary difference will not reverse in the foreseeable future.
The Group classies its nancial instruments in the following categories: at fair value through prot or loss, loansand receivables, held to maturity and available for sale. The classication depends on the purpose for which thenancial assets were acquired and their characteristics and is in accordance with IAS 39.
Financial assets at fair value through prot or loss are nancial assets held for trading and those designated by theGroup as at fair value through prot or loss upon initial recognition.
Deferred income tax assets are recognised on deductible temporary differences arising from investments insubsidiaries, associates and joint arrangements only to the extent that it is probable the temporary difference willreverse in the future and there is sufcient taxable prot available against which the temporary difference can beutilised.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the taxbases of assets and liabilities and their carrying amounts in the consolidated nancial statements. However, deferredtax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is notaccounted for i t arises from initial recognition of an asset or liability in a transaction other than a businesscombination that at the time of the transaction affects neither accounting nor taxable prot or loss. Deferred incometax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of thereporting period and are expected to apply when the related deferred income tax asset is realized or the deferredincome tax liability is settled.
Financial assets classied as held for trading
Financial assets and liabilities classied as held for trading are those assets and liabilities that Group acquires orincurs principally for the purpose of selling or repurchasing in the near term or holds as part of a portfolio that ismanaged together for short-term prot. Trading assets and liabilities are initially recognised and subsequentlymeasured at fair value in the statement of nancial position with transactions costs recognised in prot or loss. Allchanges in fair value are recognised as part of net trading income in prot or loss.
Designation at fair value through prot or loss
The Group designates certain nancial assets upon initial recognition as at fair value through prot or loss (fair valueoption). This designation cannot subsequently be changed. According to IAS 39, the fair value option is only appliedwhen the following conditions are met:
· the application of the fair value option reduces or eliminates an accounting mismatch that would otherwise ariseor· the nancial assets are part of a portfolio of nancial instruments which is risk managed and reported to seniormanagement on a fair value basis or· the nancial assets consists of debt host and an embedded derivative that must be separated.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current taxassets against current tax liabilities and when the deferred income taxes assets and liabilities relate to taxes leviedby the same taxation authority on either the same taxable entity or different taxable entities where there is anintention to settle the balances on a net basis.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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b. Loans and receivables
c. Held-to-maturity nancial assets
d. Available-for-sale nancial assets
In the consolidated statement of cash ows, cash and cash equivalents includes cash in hand, deposits held at callwith banks, other short-term highly liquid investments with original maturities of three months or less and bankoverdrafts.
· Sales or reclassication that are so close to maturity that changes on the market rate o nterest would not havea signicant effect on the nancial asset’s fair value.· Sales or reclassication after the Group has collected substantially all the asset’s original principal.· Sales or reclassication attributable to non-recurring isolated events beyond the Group’s control that could nothave been reasonably anticipated.
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with central banks, balancesheld with other banks , money market placements and highly liquid nancial assets with original maturities o essthan three months, which are subject to insignicant risk of changes in their fair value and are used by the Group inthe management o ts short-term commitments. Cash and cash equivalents are carried at amortised cost in thestatement of nancial position.
Loans and receivables are non-derivative nancial assets with xed or determinable payments that are not quoted inan active market and that the Group does not intend to sell immediately or in the near term. The Group's loans andreceivables comprises loans and advances, cash and cash equivalents and other receivables.
When the Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidentalto ownership of an asset to the lessee, the arrangement is classied as a nance lease and a receivable equal to thenet investment in the lease is recognised and presented within loans and advances.
Financial assets for which the fair value option is applied are recognised in the statement of nancial position as‘Financial assets designated at fair value’ . Fair value changes relating to nancial assets designated at fair valuethrough prot or loss are recognised in ‘Net trading income’ .
Held-to-maturity investments are carried at amortised cost using the effective interest method. A sale orreclassication of a signicant amount of held-to-maturity investments would result in the reclassication of all held-to-maturity investments as available-for-sale and prevent the Group from classifying investment securities as held-to-maturity for the current and the following two nancial years.
However, sales and reclassications in any of the following circumstances would not trigger a reclassication:
Held-to-maturity investments are non-derivative nancial assets with xed or determinable payments and xedmaturities that the Group has the positive intent and ability to hold to maturity and which are not designated at fairvalue through prot or loss or available-for-sale.
Available-for-sale nancial assets are non-derivative investments that are not designated as another category ofnancial assets. Unquoted equity securities whose fair value cannot be reliably measured are carried at cost. Allother available-for-sale investments are carried at fair value.
Interest income is recognised in prot or loss using the effective interest method. Dividend income is recognised inprot or loss when the Group becomes entitled to the dividend. Foreign exchange gains or losses on available-for-sale debt security investments are recognised in prot or loss. Other fair value changes are recognised directly inother comprehensive income until the investment is sold or impaired whereupon the cumulative gains and lossespreviously recognised in other comprehensive income are recognised in prot or loss as a reclassication adjustment.
When the Group purchases a nancial asset and simultaneously enters into an agreement to resell the asset (or asubstantially similar asset) at a xed price on a future date (“reverse repo or stock borrowing”), the arrangement isaccounted for as a loan or advance, and the underlying asset is not recognised in the Group’s nancial statements.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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2.6.2 Financial Liabilities
2.6.3 Recognition and measurement
2.7 Offsetting nancial instruments
2.8 Assets pledged as collateral
Financial assets transferred to external parties that do not qualify for de-recognition are reclassied in the statementof nancial position from investment securities to assets pledged as collateral, if the transferee has received the rightto sell or re-pledge them in the event of default from agreed terms.
Initial recognition of assets pledged as collateral is at fair value, whilst subsequent measurement is based on theclassication of the nancial asset. Assets pledged as collateral are either designated as available for sale or held tomaturity. Where the assets pledged as collateral are designated as available for sale, subsequent measurement is atfair-value through equity. Assets pledged as collateral designated as held to maturity are measured at amortisedcost.
Financial assets and liabilities are set off and the net amount reported in the statement of nancial position when theGroup has a legally enforceable right to set off the recognised amounts and there is an intention to settle on a netbasis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingenton future events and must be enforceable in the normal course of business and in the event of default, insolvency orbankruptcy of the counterparty.
Income and expenses are presented on a net basis only when permitted under IFRSs or for gains and losses arisingfrom a group of similar transactions such as in the Group's trading activity.
These consists of nancial liabilities at fair value through prot or loss and nancial liabilities at amortised cost.Financial liabilities that are not classied as at fair value through prot or loss are measured at amortised cost.Interest expenditure is recognised in interest expense. The Bank's non-derivative nancial liabilities consists of dueto other nancial institutions, deposits from customers, borrowings from local and foreign institutions, accruals andother liabilities. Such liabilities are recognised initially at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, these nancial liabilities are recognised at amortized cost using the effectiveinterest method. The Bank derecognises a nancial liability when its contractual obligations are discharged orcancelled or expired.
Regular purchases and sales of nancial assets are recognised on the settlement date. Investments are initiallyrecognised at fair value plus transaction costs for all nancial assets not carried at fair value through prot or loss.Financial assets carried at fair value through prot or loss are initially recognised at fair value and transaction costsare expensed in the income statement. Financial assets are derecognised when the rights to receive cash ows fromthe investments have expired or have been transferred and the group has transferred substantially all risks andrewards of ownership. Available-for-sale nancial assets and nancial assets at fair value through prot or loss aresubsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using theeffective interest method. Non-trade nancial liabilities are measured at amortised cost. Liabilities held for tradingare measured at fair value.
Gains or losses arising from changes in the fair value of the ‘nancial assets at fair value through prot or loss’category are presented in the income statement within ‘net trading income’ in the period in which they arise.Dividend income from nancial assets at fair value through prot or loss is recognised in the income statement aspart of other operating income when the group’s right to receive payments is established. Changes in the fair valueof nancial instruments classied as available-for-sale are recognised in other comprehensive income (OCI).
When securities classied as available for sale are sold or impaired, the accumulated fair value adjustmentsrecognised in equity are included in the income statement as ‘other operating income’ .
Interest on available-for-sale securities calculated using the effective interest method is recognised in the incomestatement as part of interest income. Dividends on available-for-sale equity instruments are recognised in theincome statement as part of other operating income when the group’s right to receive payments is established.
A non-derivative nancial asset may be reclassied from the available-for-sale category to the loans and receivablecategory if it otherwise would have met the definition of loans and receivables and if the Group has the intention andability to hold that nancial asset for the foreseeable future or until maturity.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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2.9 Impairment of nancial assets
a. Assets carried at amortised cost
The Group assesses at each reporting date whether there is objective evidence that a nancial asset or group ofnancial assets is impaired. A nancial asset or group of nancial assets is impaired and impairment losses areincurred only if there is objective evidence o mpairment as a result of one or more events that occurred after theinitial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated futurecash ows of the nancial asset or group of nancial assets that can be reliably estimated.
Evidence o mpairment may include indications that the debtors or a group of debtors is experiencing signicantnancial difculty, default or delinquency in interest or principal payments, the probability that they will enterbankruptcy or other nancial reorganisation, and where observable data indicate that there is a measurable decreasein the estimated future cash ows, such as changes in arrears or economic conditions that correlate with defaults.
The estimated period between a loss occurring and its identication is determined by local management for eachidentied portfolio. In general, the periods used vary between three months and twelve months; in exceptionalcases, longer periods are warranted.
The Group rst assesses whether objective evidence o mpairment exists individually for nancial assets that areindividually signicant and individually or collectively for nancial assets that are not individually signicant. If theGroup determines that no objective evidence o mpairment exists for an individually assessed nancial asset,whether signicant or not, it includes the asset in a group of nancial assets with similar credit risk characteristicsand collectively assesses them for impairment. Assets that are individually assessed for impairment and for which animpairment loss is or continues to be recognised are not included in a collective assessment o mpairment.
The amount of the loss is measured as the difference between the asset’s carrying amount and the present value ofestimated future cash ows (excluding future credit losses that have not been incurred) discounted at the nancialasset's original effective interest rate. The carrying amount of the asset is reduced through the use of an allowanceaccount and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturityinvestment has a variable interest rate, the discount rate for measuring any impairment loss is the current effectiveinterest rate determined under the contract. As a practical expedient, the Group may measure impairment on thebasis of an instrument’s fair value using an observable market price.
The calculation of the present value of the estimated future cash ows of a collateralized nancial asset reects thecash ows that may result from foreclosure less costs for obtaining and selling the collateral, whether or notforeclosure is probable.
Estimates of changes in future cash ows for groups of assets should reect and be directionally consistent withchanges in related observable data from period to period (for example, changes in unemployment rates, propertyprices, payment status, or other factors indicative of changes in the probability o osses in the Group and theirmagnitude). The methodology and assumptions used for estimating future cash ows are reviewed regularly by theGroup to reduce any differences between loss estimates and actual loss experience.
Future cash ows in a group of nancial assets that are collectively evaluated for impairment are estimated on thebasis of the contractual cash ows of the assets in the Group and historical loss experience for assets with credit riskcharacteristics similar to those in the Group. Historical loss experience is adjusted on the basis of current observabledata to reect the effects of current conditions that did not affect the period on which the historical loss experience isbased and to remove the effects of conditions in the historical period that do not currently exist.
For the purposes of a collective evaluation o mpairment, nancial assets are grouped on the basis of similar creditrisk characteristics (that is, on the basis of the Group’s grading process that considers asset type, industry,geographical location, collateral type, past-due status and other relevant factors). Those characteristics are relevantto the estimation of future cash ows for groups of such assets by being indicative of the debtors’ ability to pay allamounts due according to the contractual terms of the assets being evaluated.
When a loan is uncollectible, it is written off against the related allowance for loan impairment. Such loans arewritten off after all the necessary procedures have been completed and the amount of the loss has been determined.Impairment charges relating to loans and advances to customers are classied in loan impairment charges whilstimpairment charges relating to investment securities (held to maturity category) are classied in ‘impairmentcharges on other nancial assets ’ .
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
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b. Assets classied as available for sale
2.10 Interest income and expense
2.11 Fees and commission income
Fees and commission that are integral to the effective interest rate on a nancial asset are included in themeasurement of the effective interest rate. Fees, such as processing and management fees charged for assessing thenancial position of the borrower, evaluating and reviewing guarantee, collateral and other security, negotiation ofinstruments’ terms, preparing and processing documentation and nalising the transaction are an integral part of theeffective interest rate on a nancial asset or liability and are included in the measurement of the effective interestrate of nancial assets or liabilities.
Other fees and commissions which relates mainly to transaction and service fees, including loan account structuringand service fees, investment management and other duciary activity fees, sales commission, placement line fees,syndication fees and guarantee issuance fees are recognised as the related services are provided or performed.
If any such evidence exists for available-for-sale nancial assets, the cumulative loss – measured as the differencebetween the acquisition cost and the current fair value, less any impairment loss on that nancial asset previouslyrecognised in prot or loss – is removed from equity and recognised in the income statement. Impairment lossesrecognised in the consolidated income statement on equity instruments are not reversed through the consolidatedincome statement.
Interest income and expense presented in the income statement include:· Interest on nancial assets and liabilities measured at amortised cost calculated on an effective interest ratebasis;· Interest on nancial assets measured at fair value through prot or loss calculated on an effective interest ratebasis;· Interest on nancial assets measured at fair value through OCI calculated on an effective interest rate basis.
Interest income and expense for all interest-earning and interest-bearing nancial instruments are recognised in theincome statement within “interest income” and “interest expense” using the effective interest method.
The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts throughthe expected life of the nancial asset or liability (or, where appropriate, the next re-pricing date), to the net carryingamount of the nancial asset or liability. When calculating the effective interest rate, the Group estimates future cashows considering all contractual terms of the nancial instrument but not future credit losses. The calculation of theeffective interest rate includes contractual fees and points paid or received, transactions costs and discounts orpremiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that aredirectly attributable to the acquisition, issue or disposal of a nancial asset or liability.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating),the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.
The Group assesses at the end of each reporting period whether there is objective evidence that a nancial asset or agroup of nancial assets is impaired. For equity investments classied as available for sale, a signicant or prolongeddecline in the fair value of the security below its cost is objective evidence of impairment resulting in the recognitionof an impairment loss.
If, in a subsequent period, the fair value of a debt instrument classied as available for sale increases and theincrease can be objectively related to an event occurring after the impairment loss was recognised in prot or loss,the impairment loss is reversed through the income statement. Assets classied as available for sale are assessed forimpairment in the same manner as assets carried at amortised cost.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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2.12 Net trading income
2.13 Dividend income
2.14 Impairment of non-nancial assets
2.15 Non-current assets (or disposal groups) held for sale
2.16 Leases
a. Group is the lessee
i Operating lease
Any impairment loss in a disposal group is allocated rst to goodwill and then to the remaining assets and liabilitieson a prorata basis except that loss is allocated to inventories, deferred tax assets, employee benets and investmentproperty which continue to be measured in accordance with the group's accounting policies.
Dividend income is recognised when the right to receive income is established. Dividends are reected as acomponent of other operating income.
Net trading income comprises all fair value changes, net fair value gain on derivative instrument, and foreignexchange translation and trading gains/losses.
Non-current assets (or disposal groups) are classied as assets held for sale when their carrying amount is to berecovered principally through a sale transaction and a sale is considered highly probable. They are stated at thelower of carrying amount and fair value less costs to sell.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised inprior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverableamount only to the extent that the asset’s carrying amount does not exceed the carrying amount that would havebeen determined, net of depreciation or amortisation, if no impairment loss had been recognised.
The recoverable amount of an asset or cash-generating unit is the greater o ts value in use and its fair value lesscosts to sell. In assessing value in use, the estimated future cash ows are discounted to their present value using apre-tax discount rate that reects current market assessments of the time value of money and the risks specic tothe asset.
An impairment loss is recognised in the income statement if the carrying amount of an asset or its cash generatingunit exceeds its recoverable amount. A cash generating unit is the smallest identiable asset group that generatescash ows that largely are independent from other assets and groups. Impairment losses recognised in respect ofcash-generating units are allocated rst to reduce the carrying amount of any goodwill allocated to the units andthen to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
The carrying amounts of the Group’s non-nancial assets, inclusive of deferred tax assets are reviewed at eachreporting date to determine whether there is any indication o mpairment. If any such indication exists then theasset’s recoverable amount is estimated. For goodwill and intangible assets that have indenite useful lives or thatare not available for use, the recoverable amount is estimated each year.
Leases in which a signicant portion of the risks and rewards of ownership are retained by another party, the lessor,are classied as operating leases. Payments, including prepayments, made under operating leases (net of anyincentives received from the lessor) are charged to the income statement on a straight-line basis over the period ofthe lease. When an operating lease is terminated before the lease period has expired, any payment required to bemade to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.
Leases are accounted for in accordance with IAS 17, 'Leases' and IFRIC 4, 'Determining whether an arrangementcontains a lease'. They are divided into nance leases and operating leases.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
21
ii Finance lease
b.
2.17 Property, plant and equipment
i. Recognition and measurement
ii. Subsequent costs
iii. Depreciation
Depreciation is recognised in the income statement on a straight-line basis to write down the cost of each asset, totheir residual values over the estimated useful lives of each part of an item of property, plant and equipment. Leasedassets under nance lease are depreciated over the shorter of the lease term and their useful lives.
The cost of replacing part of an item of property, plant or equipment is recognised in the carrying amount of the itemi t is probable that the future economic benets embodied within the part will ow to the Group and its cost can bemeasured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance arecharged to the income statement during the nancial period in which they are incurred.
Leases, where the Group has substantially all the risks and rewards of ownership, are classied as nance leases.Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property andthe present value of the minimum lease payments. Each lease payment is allocated between the liability and nancecharges so as to achieve a constant rate on the outstanding balance of the nance lease.
Depreciation begins when an asset is available for use and ceases at the earlier of the date that the asset isderecognised or classied as held for sale in accordance with IFRS 5. A non-current asset or disposal group is notdepreciated while it is classied as held for sale.
The Group recognizes items of property, plant and equipment at the time the cost is incurred. These costs includecosts incurred initially to acquire or construct an item of property, plant and equipment as well as the costs o tsdismantlement, removal or restoration, the obligation for which an entity incurs as a consequence of using the itemduring a particular period.
The assets’ carrying values and useful lives are reviewed, and written down if appropriate, at each reporting date.Assets are impaired whenever events or changes in circumstances indicate that the carrying amount is less than therecoverable amount.
The corresponding rental obligations, net of nance charges, are included in other liabilities. The interest element ofthe nance cost is charged to the income statement over the lease period so as to produce a constant periodic rateo nterest on the remaining balance of the liability for each period. Investment properties acquired under nancelease are measured subsequently at their fair value.
Items of property and equipment are measured at cost less accumulated depreciation and impairment losses. Costincludes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of propertyor equipment have different useful lives, they are accounted for as separate items (major components) of propertyand equipment.
Group is the lessor
When assets are leased to a third party under nance lease terms, the present value of the lease income isrecognised as a receivable. The difference between the gross receivable and the present value of the receivable isrecognised as unearned nance income. Lease income is recognised over the term of the lease using the netinvestment method (before tax), which reects a constant periodic rate of return.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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iv. Derecognition
2.18 Intangible assets
Goodwill
Software
Software acquired by the Group is stated at cost less accumulated amortisation and accumulated impairment losses.Expenditure on internally developed software is recognised as an asset when the Group is able to demonstrate itsintention and ability to complete the development and use the software in a manner that will generate futureeconomic benets, and can reliably measure the costs to complete the development.
include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortisedover its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation andimpairment.
Leasehold land and buildings - Over the shorter of the useful life of 50 years or lease termLeasehold improvements - Over the shorter of the useful life of 50 years or lease termMotor vehicles - 4 yearsComputer hardware - 3 yearsFurniture and ttings - 5 yearsPlant and machinery - 5 years
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstancesindicate a potential impairment. The carrying value of the CGU containing the goodwill is compared to therecoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment isrecognised immediately as an expense and is not subsequently reversed. Gains and losses on the disposal of anentity include the carrying amount of goodwill relating to the entity sold.
An item of property and equipment is derecognised on disposal or when no future economic benets are expectedfrom its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference betweenthe net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year theasset is derecognised.
Goodwill arises on the acquisition of subsidiaries and represents the excess of the cost of the acquisition over theGroup's interest in the net fair value of the identiable assets, liabilities and contingent liabilities of the acquiredsubsidiaries at the date of acquisition. When the excess is negative, it is recognised immediately in prot or loss.Goodwill on acquisition of subsidiaries is included in intangible assets.
For the purpose o mpairment testing, goodwill acquired in a business combination is allocated to each of the CGUs,or groups of CGUs, that is expected to benet from the synergies of the combination. Each unit or group of units towhich the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored forinternal management purposes. Goodwill is monitored at the operating segment level.
The estimated useful lives for the current and comparative periods are as follows:
Depreciation rates, methods and the residual values underlying the calculation of depreciation o tems of property,plant and equipment are kept under review on an annual basis to take account of any change in circumstances.
Capital work in progress is not depreciated. Upon completion it is transferred to the relevant asset category.Depreciation methods, useful lives and residual values are reassessed at each reporting date.
Subsequent expenditure on software assets is capitalised only when it increases the future economic benetsembodied in the specic asset to which it relates. All other expenditure is expensed as incurred.
Development costs previously expensed cannot be capitalised.The capitalised costs of internally developed software
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
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2.19 Employee benets
Dened contribution plans
Dened benet plans
Termination benets
Short-term employee benets
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged orcredited to equity in other comprehensive income in the period in which they arise.
The current service cost of the dened benet plan, recognised in the income statement in employee benetexpense, except where included in the cost of an asset, reects the increase in the dened benet obligationresulting from employee service in the current year, benet changes curtailments and settlements.
Amortisation method, useful lives, and residual values are reviewed at each nancial year-end and adjusted ifappropriate.
For dened contribution plans, the Group pays contributions to publicly or privately administered pension fundadministrators (PFA) on a mandatory, contractual or voluntary basis. The Group has no further payment obligationsonce the contributions have been paid. The contributions are recognised as employee benet expense in the incomestatement when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or areduction in the future payments is available.
Past-service costs are recognised immediately in the income statement. The net interest cost is calculated byapplying the discount rate to the net balance of the dened benet obligation. This cost is included in employeebenet expense in the income statement.
Short-term employee benet obligations are measured on an undiscounted basis and are expensed as the relatedservice is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or prot-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past serviceprovided by the employee and the obligation can be estimated reliably.
A dened contribution plan is a pension plan under which the Group pays xed contributions to a separate entity.The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufcientassets to pay all employees the benets relating to employee service in the current and prior periods.
A dened benet plan is a pension plan that denes an amount of pension benet that an employee will receive onretirement, usually dependent on one or more factors, such as age, years of service and compensation. The liabilityrecognised in the statement of nancial position in respect of dened benet pension plans is the present value ofthe dened benet obligation at the end of the reporting period. The dened benet obligation is calculated annuallyby independent actuaries using the projected unit credit method. The present value of the dened benet obligationis determined by discounting the estimated future cash outows using interest rates of high-quality corporate bondsthat are denominated in the currency in which the benets will be paid, and that have terms to maturityapproximating the terms of the related pension liability.
Termination benets are recognised as an expense when the Group is demonstrably committed, without realisticpossibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date.Termination benets for voluntary redundancies are recognised if the Group has made an offer encouragingvoluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimatedreliably.
Amortisation is recognised in prot or loss on a straight-line basis over the estimated useful life of the software, fromthe date that it is available for use since this most closely reects the expected pattern of consumption of the futureeconomic benets embodied in the asset. The estimated useful life of software is 3 years.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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2.20 Provisions
2.21 Financial guarantees
2.22 Share capital
Ordinary shares are classied as equity.
Share issue costs
Dividends on the Bank's ordinary shares
A provision for onerous contracts is recognised when the expected benets to be derived by the Group from acontract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measuredat the present value of the lower of the expected cost of terminating the contract and the expected net cost ofcontinuing with the contract. Before a provision is established, the Group recognises any impairment loss on theassets associated with that contract.
Dividends proposed by the Directors but not yet approved by members are disclosed in the nancial statements inaccordance with the requirements of the Company and Allied Matters Act.
Incremental costs directly attributable to the issue of new shares or options or to the acquisition of a business areshown in equity as a deduction, net of tax, from the proceeds.
Dividends on the Bank's ordinary shares are recognised in equity in the period in which they are approved by theBank’s shareholders. Dividends for the year that are declared after the date of the consolidated statement of nancialposition are dealt with in the subsequent events note.
Where the Bank or any member of the Group purchases the Bank’s equity share capital (treasury shares), theconsideration paid, including any directly attributable incremental costs (net o ncome taxes) is deducted fromequity attributable to the Bank’s equity holders until the shares are cancelled or reissued. Where such ordinaryshares are subsequently reissued, any consideration received, net of any directly attributable incremental transactioncosts and the related income tax effects, is included in equity attributable to the company’s equity holders.
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation thatcan be estimated reliably, and it is probable that an outow of economic benets will be required to settle theobligation. Provisions are determined by discounting the expected future cash ows at a pre-tax rate that reectscurrent market assessments of the time value of money and, where appropriate, the risks specic to the liability.
Financial guarantee contracts are contracts that require the issuer to make specied payments to reimburse theholder for a loss it incurs because a specied debtor fails to make payments when due in accordance with the termsof a debt instrument.
Financial guarantees are initially recognised in the consolidated nancial statements at their fair values on the datethat the guarantee was given; and the initial fair value amortised over the life of the nancial guarantee. Theguarantee liability is subsequently carried at the higher of this amortised amount and the present value of anyexpected payment (when a payment under the guarantee has become probable).
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan,and the restructuring either has commenced or has been announced publicly. The Group recognizes no provision forfuture operating losses.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
25
2.23 Earnings per share
2.24 Segment reporting
2.25 Derivatives held for risk management purposes
2.26 Borrowings
2.27 Investment properties
2.28 Trading properties
2.29 Liabilities under investment contracts
Liabilities under investment contracts are clients' funds invested on clients' behalf by the Group and are designatedas other nancial liabilities at amortised cost.
Fees paid on the establishment of borrowings are recognised as transaction costs of the borrowing to the extent thatit is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-downoccurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down,the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which itrelates.
Derivatives held for risk management purposes include all derivative assets and liabilities that are not classied astrading assets or liabilities. Derivatives are recognised initially at fair value; attributable transaction costs arerecognised in prot or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair valuewith changes in fair value recognised in prot or loss (net trading income).
Investment property is property held either to earn rental income or for capital appreciation or for both, but not forsale in the ordinary course of business, use in the production of goods and services or for administrative purposes.Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition,investment properties are carried in the statement of nancial position at their market value and revalued yearly ona systematic basis.
Trading properties are properties developed for sale. Trading properties are measured at the lower of cost and netrealisable value. The cost of trading properties includes expenditure incurred in acquiring the properties, productionor conversion costs and other costs incurred in bringing them to their existing location and condition. The netrealisable value is the estimated selling price in the ordinary course of business less the estimated cost to sell.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequentlycarried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption valueis recognised in the income statement over the period of the borrowings using the effective interest method.
The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated bydividing the prot or loss attributable to ordinary shareholders of the Group by the weighted average number ofordinary shares outstanding during the period.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding toassume conversion of all dilutive potential ordinary shares.
An operating segment is a component of the Group that engages in business activities from which it can earnrevenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’sother components, whose operating results are reviewed regularly by the Executive Management Committee to makedecisions about resources allocated to each segment and assess its performance, and for which discrete nancialinformation is available. All costs that are directly traceable to the operating segments are allocated to the segmentconcerned, while indirect cost are allocated based on the benets derived from such costs.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
26
(All amounts in millions of Naira unless otherwise stated)
3. Financial risk management
3.1 Credit risk
3.1.1 Maximum exposure to credit risk before collateral held or credit enhancements
Credit risk maximum exposure relating to on-balance sheet items
31 December 31 December 31 December 31 December2015 2014 2015 2014
160,989 248,035 160,324 207,040Due from banks and other financial institutions 37,031 72,978 35,617 56,114Financial assets held for trading - debt securities 131 16,055 131 1,384Derivative financial assets 178 - - -Loans and advances to customers:- Term loans 562,470 500,541 558,500 471,083- Overdraft 98,801 111,167 98,278 98,942- Finance lease receivables 43,625 34,066 43,625 28,172
Investment securities - debt securities:- Available for sale investments 5,335 78 2,628 -- Held to maturity investments 50,756 125,101 43,031 72,687- Loans and receivables investments 34,949 36,058 33,919 18,387
Asset pledged as collateral - debt securities 68,701 90,170 68,701 34,066Other assets 1,360 6,473 7,095 6,594
1,064,326 1,240,722 1,051,849 994,469
Loans exposure to total credit risk exposure 66% 52% 67% 60%15% 22% 14% 13%
Other exposures to total credit risk exposure 19% 26% 19% 27%
Credit exposures relating to off-balance sheet items
31 December 31 December 31 December 31 December2015 2014 2015 2014
Bonds and guarantees 75,339 64,983 75,280 61,664Letters of credit 31,352 17,691 31,352 15,608
106,691 82,674 106,632 77,272
Total maximum exposure 1,171,017 1,323,396 1,158,481 1,071,741
Group Bank
Debt securities exposure to total credit risk exposure
The table above shows a worst-case scenario of credit risk exposure to the Group as at 31 December 2015 and 31December 2014 without taking account of any collateral held or other credit enhancements attached. For on-balance-sheetassets, the exposures set out above are based on amounts reported in the statement of nancial position.
Group Bank
The Group's maximum exposure to credit risk at 31 December 2015 and 31 December 2014 respectively is represented bythe carrying amounts of the nancial assets in the statement of nancial position.
Cash and balances with central banks
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
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(All amounts in millions of Naira unless otherwise stated)
3.1.2 Credit quality of nancial assets using external ratings
Counterparties with external credit rating (S&P)- A- AA- B- BB
Sovereign ratings- Nigeria (B+) S&P-Other Sovereign Ratings
Counterparties without external credit ratings- Local discount houses-Foreign subsidiaries
Total
Financial assets held for trading
Sovereign ratings- Nigeria (B+) S&P
Sovereign ratings- Nigeria (B+) S&P-Other Sovereign Ratings
Counterparties without external credit ratings- Corporate bonds
Total
Assets pledged as collateralSovereign ratings
- Nigeria (B+) S&P-Other Sovereign Ratings
Counterparties without external credit ratings- Corporate bonds
The credit quality of balances due from banks and other nancial institutions are assessed by reference to external credit
ratings information about counterparty default rates.
Due from other banks and other nancial institutions
IFRS 7, 'Financial instruments: disclosures', requires information about the credit quality of nancial assets. This information is provided below for balances
The credit quality of debt investment securities (available for sale, held to maturities and loans and receivables) are assessed by reference to external credit
Investment securities - Debt
31 December 31 December 31 December 31 December2015 2014 2015 2014
20,998 48,812 19,838 41,319189 82 189 82
4,087 7,874 4,087 7,874- 337 - 337
25,274 57,105 24,114 49,612
11,757 6,502 11,503 6,502- 938 - -
11,757 7,440 11,503 6,502
- 39 - -- 8,394 - -- 8,433 - -
37,031 72,978 35,617 56,114
31 December 31 December 31 December 31 December2015 2014 2015 2014
131 16,055 131 1,384
Group Bank
Group Bank
31 December 31 December 31 December 31 December2015 2014 2015 2014
56,091 143,640 45,658 72,68731,862 17,457 30,945 18,247
87,953 161,097 76,603 90,934
3,087 140 2,975 1403,087 140 2,975 140
91,040 161,237 79,578 91,074
55,164 - 55,164 -12,731 90,170 12,731 34,066
806 806 -68,701 90,170 68,701 34,066
Group Bank
due from banks and nancial institutions and debt investment securities.
ratings information about counterparty default rates.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
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3.1.3 Credit risk concentration
Concentration risk refers to the risk arising from an uneven distribution of counterparties within a credit portfolio or fromconcentration in sectors, geographical locations etc which poses a potential threat to the solvency of the counterparty.
The Group recognizes that concentration risk may exist among loans, which though may have been prudentlyunderwritten, are collectively sensitive to the same economic and nancial or business development events, such that anegative development affecting these factors may cause loans to perform as if it were a single, large exposure.
IFRS 7 requires disclosures about concentrations of credit risk. Concentration of credit risk arise from nancial instrumentsthat have similar characteristics and are affected similarly by changes in economic or other conditions. This informationhas been provided along geographical areas and economic sectors.
The Group complies fully with all regulatory portfolio concentration limits as determined by the CBN. The Group setsinternal thresholds, which are more conservative than the regulatory limits and this acts as a buffer to ensure compliance.In addition to regulatory limits, the Group uses risk-based measurement systems to dene a variety of concentrationthresholds for its credit portfolio. These include; sectors, geographical locations, strategic business units etc.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
29
(All
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aira
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oth
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ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
3.
Fin
an
cia
lri
sk
man
ag
em
en
tcon
tin
ued
i.C
on
cen
trati
on
of
risks
of
n
an
cia
lassets
wit
hcre
dit
risk
exp
osu
re
31
Decem
ber
20
15
Cre
dit
risk
co
ncen
trati
on
by
geog
rap
hy
rela
tin
gto
on
-bala
nce
sh
eet
Cash
and
short
-term
funds
(bala
nces
held
with
centr
albank)
Due
from
banks
and
oth
er
financia
lin
stitu
tions
Fin
ancia
lassets
held
for
tradin
g-
debt
securi
ties
Derivative
financia
lasset
Loans
and
advances
tocusto
mers
:-
Term
loans
-O
verd
raft
-Fin
ance
lease
receiv
able
sIn
vestm
ent
securi
ties
-Available
for
sale
-D
ebt
securi
ties
-H
eld
tom
atu
rity
-D
ebt
securi
ties
-Loans
and
receiv
able
s-
Debt
securities
Asset
ple
dged
as
collate
ral-
debt
securi
ties
Oth
er
assets
Cre
dit
risk
co
ncen
trati
on
by
ge
og
rap
hy
rela
tin
gto
off
-ba
lan
ce
sh
ee
t
Bonds
and
guara
nte
es
Lett
ers
ofcre
dit
The
follow
ing
table
bre
aks
dow
nth
eG
roup’s
cre
dit
exposure
(without
takin
gin
toaccount
any
collate
ralheld
or
oth
er
cre
dit
support
),as
cate
gorised
by
geogra
phic
al
regio
nas
at
the
report
ing
date
.For
this
table
,th
eG
roup
has
allocate
dexposure
sto
regio
ns
based
on
the
countr
yofdom
icile
ofi
tscounte
rpart
ies.
160,3
24
665
160,9
89
160,3
24
-160,3
24
14,5
91
22,4
40
37,0
31
14,2
02
21,4
15
35,6
17
131
-131
131
-131
-178
178
--
-
561,9
08
562
562,4
70
558,5
00
-558,5
00
96,0
33
2,7
68
98,8
01
98,2
78
-98,2
78
43,6
25
-43,6
25
43,6
25
-43,6
25
2,6
30
2,7
05
5,3
35
2,6
28
-2,6
28
45,5
11
5,2
45
50,7
56
43,0
31
-43,0
31
33,9
30
1,0
19
34,9
49
32,9
00
1,0
19
33,9
19
68,7
01
-68,7
01
68,7
01
-68,7
01
1,2
77
83
1,3
60
7,0
95
-7,0
95
1,0
28,6
61
35,6
65
1,0
64,3
26
1,0
29,4
15
22,4
34
1,0
51,8
49
75,3
39
-75,3
39
75,2
80
-75,2
80
31,3
52
-31,3
52
31,3
52
-31,3
52
106,6
91
-106,6
91
106,6
32
-106,6
32
Gro
up
Ban
kW
ith
in
Nig
eri
a
Ou
tsid
e
Nig
eri
aTota
l
Wit
hin
Nig
eri
a
Ou
tsid
e
Nig
eri
aTota
l
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
30
NO
TES T
O T
HE F
INAN
CIA
L S
TATEM
EN
TS
Fin
an
cia
lri
sk
man
ag
em
en
tcon
tin
ued
31
Decem
ber
20
14
Cre
dit
risk
co
nc
en
trati
on
by
ge
og
rap
hy
rela
tin
gto
on
-ba
lan
ce
sh
ee
t
Bala
nces
held
with
Centr
albank
Due
from
banks
and
oth
er
financia
lin
stitu
tions
Fin
ancia
lassets
held
for
tradin
g-
debt
securi
ties
Loans
and
advances
tocusto
mers
:-
Term
loans
-O
verd
raft
-Fin
ance
lease
receiv
able
sIn
vestm
ent
securi
ties
-Available
for
sale
-D
ebt
securi
ties
-H
eld
tom
atu
rity
-D
ebt
securi
ties
-Loans
and
receiv
able
s-
Debt
securities
Asset
ple
dged
as
collate
ral-
debt
securi
ties
Oth
er
assets
Cre
dit
risk
co
nc
en
trati
on
by
ge
og
rap
hy
rela
tin
gto
off
-ba
lan
ce
sh
ee
t
Bonds
and
guara
nte
es
Lett
ers
ofcre
dit
246,0
17
2,0
18
248,0
35
207,0
40
-207,0
40
16,7
68
56,2
10
72,9
78
8,1
04
48,0
10
56,1
14
16,0
55
-16,0
55
1,3
84
-1,3
84
500,1
10
431
500,5
41
471,0
83
-471,0
83
111,1
67
-111,1
67
98,9
42
-98,9
42
34,0
66
-34,0
66
28,1
72
-28,1
72
78
-78
--
-114,7
22
10,3
79
125,1
01
72,6
87
-72,6
87
36,0
58
-36,0
58
18,3
87
-18,3
87
90,1
70
-90,1
70
34,0
66
-34,0
66
6,2
31
242
6,4
73
4,9
57
1,6
37
6,5
94
1,1
71,4
42
69,2
80
1,2
40,7
22
944,8
22
49,6
47
994,4
69
64,5
27
456
64,9
83
61,6
64
-61,6
64
17,6
91
-17,6
91
15,6
08
-15,6
08
82,2
18
456
82,6
74
77,2
72
-77,2
72
Gro
up
Ban
kW
ith
in
Nig
eri
a
Ou
tsid
e
Nig
eri
aTota
l
Wit
hin
Nig
eri
a
Ou
tsid
e
Nig
eri
aTota
l
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
31
NO
TES T
O T
HE F
INAN
CIA
L S
TATEM
EN
TS
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
ii.
In
du
str
ysecto
rs
Cre
dit
risk
co
ncen
trati
on
sb
yin
du
str
yre
lati
ng
too
n-b
ala
nce
sh
eet
item
s
The
follow
ing
table
bre
aks
dow
nth
eG
roup’s
cre
dit
exposure
at
gro
ss
am
ounts
(without
takin
gin
toaccount
any
collate
ralheld
or
oth
er
cre
dit
support
),as
cate
gorised
by
the
Bank's
twenty
four
(24)
defined
industr
ysecto
r.
Gro
up
31
Decem
ber
20
15
Secto
r
Agriculture
Associa
tion/N
GO
s
Avia
tion
--
--
5,8
18
-
Buildin
g&
Constr
uction
--
--
43,6
71
-
Education
&EducationalServ
ice
--
--
17,8
50
-
Fin
ancia
lServ
ices
-37,0
31
--
19,4
66
1
Genera
lCom
merc
e
Health
&M
edic
alServ
ices
Hospitality
Info
rmation
Technolo
gy
Manufa
ctu
ring
Maritim
e
Media
&Ente
rtain
ment
Min
ing &
Quarr
yin
g
Oil
&G
as
Dow
nstr
eam
Oil
&G
as
Engin
eering
Serv
ices
Oil
&G
as
Upstr
eam
Pow
er
Pro
fessio
nalServ
ices
Public
Secto
r
RealEsta
te
Reta
il
Tele
com
munic
ation
Tra
nsport
ation
Tota
l
--
--
5,7
40
--
-5,7
40
--
--
2,4
67
--
-2,4
67
456
-6,2
74
--
43,6
71
--
17,8
50
350
1,3
60
58,2
08
--
--
66,9
76
1,3
32
--
68,3
08
--
--
857
--
-857
--
--
26,1
78
--
-26,1
78
--
--
5,2
93
--
-5,2
93
--
--
51,9
14
--
-51,9
14
--
--
20,0
40
--
-20,0
40
--
--
5,0
87
--
-5,0
87
--
--
557
--
-557
--
--
27,6
73
--
-27,6
73
--
--
62,7
33
--
-62,7
33
--
--
119,0
54
--
-119,0
54
--
--
23,8
61
--
-23,8
61
--
--
6,4
26
--
-6,4
26
160,9
89
-131
178
90,7
04
89,7
07
67,8
95
-409,6
04
--
--
40,9
21
--
-40,9
21
--
--
32,8
03
--
-32,8
03
--
--
26,0
62
--
-26,0
62
--
--
2,7
45
--
-2,7
45
160,9
89
37,0
31
131
178
704,8
96
91,0
40
68,7
01
1,3
60
1,0
64,3
26
Deri
vati
ve
fin
an
cia
l
assets
Oth
er
assets
held
wit
h
Cen
tral
Ban
k
Du
efr
om
ban
ks
an
d
oth
er
fin
an
cia
l
insti
tuti
on
s
Fin
an
cia
l
assets
held
for
trad
ing
-
deb
t
secu
riti
es
Loan
san
d
ad
van
ces
to
cu
sto
mers
In
vestm
en
t
secu
riti
es
-
deb
t
secu
riti
es
Asset
ple
dg
ed
as
coll
ate
ral
-
deb
t
secu
riti
es
Bala
nce
To
tal
--
43,6
71
--
-
-17,8
50
--
--
-19,4
66
1
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
32
NO
TES T
O T
HE F
INAN
CIA
L S
TATEM
EN
TS
Gro
up
31
Decem
ber
20
14
Secto
rAgri
culture
Associa
tion/N
GO
sAvia
tion
Buildin
g&
Constr
uction
Education
&EducationalServ
ice
Fin
ancia
lServ
ices
Genera
lCom
merc
eH
ealth
&M
edic
alServ
ices
Hospitality
Info
rmation
Technolo
gy
Manufa
ctu
ring
Maritim
eM
edia
&Ente
rtain
ment
Min
ing &
Quarr
yin
gO
il&
Gas
Dow
nstr
eam
Oil
&G
as
Engin
eeri
ng
Serv
ices
Oil
&G
as
Upstr
eam
Pow
er
Pro
fessio
nalServ
ices
Public
Secto
rRealEsta
teReta
ilTele
com
munic
ation
Tra
nsport
ation
Tota
l
--
-17,2
34
--
-17,2
34
--
-2,6
07
--
-2,6
07
--
-8,1
72
--
-8,1
72
--
-40,1
88
--
-40,1
88
--
-9,5
40
--
-9,5
40
-72,9
78
-7,1
87
10,9
66
-6,4
73
97,6
04
--
-69,3
31
--
-69,3
31
--
-1,4
78
--
-1,4
78
--
-29,9
36
--
-29,9
36
--
-11,3
36
--
-11,3
36
--
-40,9
54
--
-40,9
54
--
-19,7
52
--
-19,7
52
--
-5,6
65
--
-5,6
65
--
-774
--
-774
--
-21,3
04
--
21,3
04
--
-79,4
56
--
-79,4
56
--
-120,6
77
--
-120,6
77
--
-19,3
58
--
-19,3
58
--
-14,0
14
--
-14,0
14
248,0
35
-16,0
55
47,8
33
150,2
71
90,1
70
-552,3
64
--
-23,5
20
--
-23,5
20
--
-15,2
01
--
-15,2
01
--
-31,4
09
--
-31,4
09
--
-8,8
48
--
-8,8
48
248,0
35
72,9
78
16,0
55
645,7
74
161,2
37
90,1
70
6,4
73
1,2
40,7
22
Oth
er
assets
Tota
lB
ala
nces
held
wit
h
Cen
tral
Ban
k
Du
efr
om
ban
ks
an
d
oth
er
fin
an
cia
l
insti
tuti
on
s
Fin
an
cia
l
assets
held
for
trad
ing
-
deb
t
secu
riti
es
Lo
an
san
d
ad
van
ces
to
cu
sto
mers
In
vestm
en
t
secu
riti
es
-
deb
t
secu
riti
es
Asset
ple
dg
ed
as
coll
ate
ral
-
deb
t
secu
riti
es
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
33
STATEM
EN
TO
FCASH
FLO
WS
Ban
k
31
Decem
ber
20
15
Secto
rAgri
culture
Associa
tion/N
GO
sAvia
tion
Buildin
g&
Constr
uction
Education
&EducationalServ
ice
Fin
ancia
lServ
ices
Genera
lCom
merc
eH
ealth
&M
edic
alServ
ices
Hospitality
Info
rmation
Technolo
gy
Manufa
ctu
ring
Maritim
eM
edia
&Ente
rtain
ment
Min
ing &
Quarr
yin
gO
il&
Gas
Dow
nstr
eam
Oil
&G
as
Engin
eeri
ng
Serv
ices
Oil
&G
as
Upstr
eam
Pow
er
Pro
fessio
nalServ
ices
Public
Secto
rRealEsta
teReta
ilTele
com
munic
ation
Tra
nsport
ation
Tota
l
--
-5,7
40
--
-5,7
40
--
-2,4
67
--
-2,4
67
--
-5,8
18
-456
-6,2
74
--
-42,6
56
--
-42,6
56
--
-17,8
50
--
-17,8
50
-35,6
17
-19,4
66
3,1
01
350
7,0
95
65,6
29
--
-65,4
40
1,3
32
--
66,7
72
--
-857
--
-857
--
-26,1
78
--
-26,1
78
--
-5,2
93
--
-5,2
93
--
-50,7
24
--
-50,7
24
--
-20,0
40
--
-20,0
40
--
-5,0
87
--
-5,0
87
--
-557
--
-557
--
-27,6
73
--
-27,6
73
--
-62,7
33
--
-62,7
33
--
-119,0
54
--
-119,0
54
--
-23,8
59
--
-23,8
59
--
-6,4
26
--
-6,4
26
160,3
24
-131
90,7
04
75,1
45
67,8
95
-394,1
99
--
-40,9
21
--
-40,9
21
--
32,0
53
--
-32,0
53
--
-26,0
62
--
-26,0
62
--
-2,7
45
--
-2,7
45
160,3
24
35,6
17
131
700,4
03
79,5
78
68,7
01
7,0
95
1,0
51,8
49
Oth
er
assets
Tota
lB
ala
nces
held
wit
h
Cen
tral
Ban
k
Du
efr
om
ban
ks
an
d
oth
er
fin
an
cia
l
insti
tuti
on
s
Fin
an
cia
l
assets
held
for
trad
ing
-
deb
t
secu
riti
es
Lo
an
san
d
ad
van
ces
to
cu
sto
mers
In
vestm
en
t
secu
riti
es
-
deb
t
secu
riti
es
Asset
ple
dg
ed
as
coll
ate
ral
-
deb
t
secu
riti
es
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
34
NO
TES T
O T
HE F
INAN
CIA
L S
TATEM
EN
TS
Ban
k
31
Decem
ber
20
14
Secto
rAgri
culture
Associa
tion/N
GO
sAvia
tion
Buildin
g&
Constr
uction
Education
&EducationalServ
ice
Fin
ancia
lServ
ices
Genera
lCom
merc
eH
ealth
&M
edic
alServ
ices
Hospitality
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Technolo
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--
-4,6
78
--
-4,6
78
--
-2,6
03
--
-2,6
03
--
-7,8
23
--
-7,8
23
--
-38,7
54
--
-38,7
54
--
-8,4
28
--
-8,4
28
-56,1
14
-6,3
06
140
-6,5
94
69,1
54
--
-64,3
33
--
-64,3
33
--
-1,4
50
--
-1,4
50
--
-29,9
31
--
-29,9
31
--
-4,9
78
--
-4,9
78
--
-34,6
61
--
-34,6
61
--
-18,9
51
--
-18,9
51
--
-5,6
57
--
-5,6
57
--
-594
--
-594
--
-16,3
05
--
-16,3
05
--
-79,4
50
--
-79,4
50
--
120,6
73
--
-120,6
73
--
-13,7
90
--
-13,7
90
--
-13,9
98
--
-13,9
98
207,0
40
-1,3
84
47,6
37
90,9
34
34,0
66
-381,0
61
--
-21,1
88
--
-21,1
88
--
-20,6
80
--
-20,6
80
--
-31,4
07
--
-31,4
07
--
-3,9
22
--
-3,9
22
207,0
40
56,1
14
1,3
84
598,1
97
91,0
74
34,0
66
6,5
94
994,4
69
Bala
nces
held
wit
h
Cen
tral
Ban
k
Du
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ban
ks
an
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fin
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Fin
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assets
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Lo
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In
vestm
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deb
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Asset
ple
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coll
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ral
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deb
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secu
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Oth
er
assets
Tota
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(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
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DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
35
NO
TES T
O T
HE F
INAN
CIA
L S
TATEM
EN
TS
Cre
dit
risk
co
nc
en
tra
tio
ns
by
ind
us
try
rela
tin
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off
-ba
lan
ce
sh
ee
tit
em
s
31
Decem
ber
20
15
Agri
culture
Associa
tion/N
GO
sAvia
tion
Buildin
g&
Constr
uction
Fin
ancia
lServ
ices
Genera
lCom
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Info
rmation
Technolo
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Manufa
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Maritim
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&Q
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ation
Tota
l
-4,1
22
4,1
22
-4,0
97
4,0
97
5-
55
-5
83
-83
82
-82
8,8
33
3,7
83
12,6
16
8,7
77
3,7
61
12,5
38
1,3
10
511
1,8
21
1,3
02
508
1,8
10
52,8
54
1,8
31
54,6
85
52,9
34
2,0
12
54,9
46
464
-464
461
-461
267
-267
265
-265
7,7
87
3,9
22
11,7
09
7,7
40
3,8
98
11,6
38
57
-57
57
-57
6-
66
-6
90
-90
89
-89
191
12,5
21
12,7
12
190
12,4
44
12,6
34
1,5
94
391
1,9
85
1,5
85
389
1,9
74
1,1
64
-1,1
64
1,1
57
-1,1
57
84
-84
83
-83
512
4,2
71
4,7
83
510
4,2
43
4,7
53
28
-28
28
-28
10
-10
9-
9
75
,33
93
1,3
52
10
6,6
91
75
,28
03
1,3
52
10
6,6
32
Bon
ds
an
d
gu
ara
nte
es
Lett
ers
of
cre
dit
Tota
lB
on
ds
an
d
gu
ara
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es
Lett
ers
of
cre
dit
Tota
l
Gro
up
Ban
k
(All
am
ounts
inm
illions
ofN
aira
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ss
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erw
ise
sta
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CO
NS
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S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
36
NO
TES T
O T
HE F
INAN
CIA
L S
TATEM
EN
TS
31
Decem
ber
20
14
Agri
culture
Associa
tion/N
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Buildin
g&
Constr
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Education
&EducationalServ
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Fin
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Hospitality
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2,2
27
-1,9
65
1,9
65
210
-210
199
-199
694
-694
659
-659
32,1
91
185
32,3
76
30,5
47
163
30,7
10
609
-609
577
-577
2,0
98
-2,0
98
1,9
91
-1,9
91
10,8
50
5,4
02
16,2
52
10,2
96
4,7
66
15,0
62
11
-11
11
-11
749
-749
711
-711
815
124
939
774
109
883
1,1
71
2,1
95
3,3
66
1,1
11
1,9
37
3,0
48
1,9
85
123
2,1
08
1,8
83
109
1,9
92
25
31
56
24
27
51
--
--
--
1,0
68
5,9
14
6,9
82
1,0
13
5,2
18
6,2
31
3,4
72
1,1
91
4,6
63
3,2
95
1,0
51
4,3
46
1,4
77
-1,4
77
1,4
02
-1,4
02
3,6
08
-3,6
08
3,4
24
-3,4
24
542
-542
515
-515
2,4
82
299
2,7
81
2,3
53
263
2,6
16
140
-140
133
-133
694
-694
659
-659
80
-80
76
-76
12
-12
11
-11
64
,98
31
7,6
91
82
,67
46
1,6
64
15
,60
87
7,2
72
Bon
ds
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d
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Lett
ers
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ounts
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ofN
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NS
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RA
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AN
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LS
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TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
37
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
(All
am
ounts
inm
illions
ofN
aira
unle
ss
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erw
ise
sta
ted)
CO
NS
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TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
31
Decem
ber
20
15
Secto
rAgri
culture
Associa
tion/N
GO
sAvia
tion
Buildin
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ancia
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Hospitality
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rmation
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gO
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2,2
51
3,4
89
-5,7
40
2,2
51
3,4
89
-5,7
40
2,2
64
175
28
2,4
67
2,2
64
175
28
2,4
67
5,4
98
300
20
5,8
18
5,4
98
300
20
5,8
18
22,3
62
21,1
36
173
43,6
71
21,3
47
21,1
36
173
42,6
56
17,1
02
582
166
17,8
50
17,1
02
582
166
17,8
50
10,8
82
8,5
13
71
19,4
66
10,8
82
8,5
13
71
19,4
66
48,0
72
18,4
77
427
66,9
76
46,7
31
18,2
82
427
65,4
40
802
24
31
857
802
24
31
857
24,1
56
1,9
89
33
26,1
78
24,1
56
1,9
89
33
26,1
78
5,1
17
164
12
5,2
93
5,1
17
164
12
5,2
93
45,4
98
6,0
97
319
51,9
14
44,3
43
6,0
62
319
50,7
24
3,1
06
1,3
77
15,5
57
20,0
40
3,1
06
1,3
77
15,5
57
20,0
40
4,2
79
691
117
5,0
87
4,2
79
691
117
5,0
87
16
541
-557
16
541
-557
20,4
72
6,8
46
355
27,6
73
20,4
72
6,8
46
355
27,6
73
35,0
39
2,4
50
25,2
44
62,7
33
35,0
39
2,4
50
25,2
44
62,7
33
119,0
54
--
119,0
54
119,0
54
--
119,0
54
18,4
77
5,3
83
123,8
61
18,4
76
5,3
82
123,8
59
4,5
33
1,7
66
127
6,4
26
4,5
33
1,7
66
127
6,4
26
87,5
40
3,1
64
-90,7
04
87,5
40
3,1
64
-90,7
04
30,2
69
10,6
47
540,9
21
30,2
69
10,6
47
540,9
21
29,3
57
3,4
26
20
32,8
03
28,8
99
3,1
34
20
32,0
53
25,1
08
954
-26,0
62
25,1
08
954
-26,0
62
1,2
16
610
919
2,7
45
1,2
16
610
919
2,7
45
562,4
70
98,8
01
43,6
25
704,8
96
558,5
00
98,2
78
43,6
25
700,4
03
Term
loan
s
Overd
raft
Fin
an
ce
lease
receiv
ab
les
Tota
lTerm
loan
sG
rou
pB
an
kO
verd
raft
Fin
an
ce
lease
receiv
ab
les
Tota
l
Cre
dit
ris
k c
on
cen
trati
on
by in
du
str
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f lo
an
s a
nd
ad
van
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o c
usto
mers
by p
rod
ucts
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
38
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
31
Decem
ber
20
14
Secto
rAgri
culture
Associa
tion/N
GO
sAvia
tion
Buildin
g&
Constr
uction
Education
&EducationalServ
ice
Fin
ancia
lServ
ices
Genera
lCom
merc
eH
ealth
&M
edic
alServ
ices
Hospitality
Info
rmation
Technolo
gy
Manufa
ctu
ring
Maritim
eM
edia
&Ente
rtain
ment
Min
ing &
Quarr
yin
gO
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Gas
Dow
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eam
Oil
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as
Engin
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Serv
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Pro
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nalServ
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Public
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com
munic
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Tra
nsport
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Tota
l
11,9
57
5,1
49
128
17,2
34
3,0
61
1,5
72
45
4,6
78
1,5
47
458
602
2,6
07
1,5
45
457
601
2,6
03
5,0
07
2,7
73
392
8,1
72
4,7
07
2,7
46
370
7,8
23
22,8
74
14,6
94
2,6
20
40,1
88
21,8
39
14,3
87
2,5
28
38,7
54
6,9
11
1,3
55
1,2
74
9,5
40
6,1
37
1,1
71
1,1
20
8,4
28
2,2
49
4,6
90
248
7,1
87
1,4
02
4,6
88
216
6,3
06
51,3
36
14,4
52
3,5
43
69,3
31
49,9
97
11,4
30
2,9
06
64,3
33
462
265
751
1,4
78
438
263
749
1,4
50
27,3
84
1,9
52
600
29,9
36
27,3
82
1,9
50
599
29,9
31
6,1
25
1,0
66
4,1
45
11,3
36
2,7
17
461
1,8
00
4,9
78
28,6
01
10,1
45
2,2
08
40,9
54
24,3
49
8,4
73
1,8
39
34,6
61
13,8
85
5,3
74
493
19,7
52
13,2
70
5,2
59
422
18,9
51
4,7
23
445
497
5,6
65
4,7
20
443
494
5,6
57
150
624
-774
112
482
-594
11,4
78
3,8
66
5,9
60
21,3
04
7,4
08
3,0
02
5,8
95
16,3
05
69,8
59
6,1
09
3,4
88
79,4
56
69,8
57
6,1
06
3,4
87
79,4
50
111,1
42
9,5
35
-120,6
77
111,1
40
9,5
33
-120,6
73
18,2
43
1,1
15
-19,3
58
13,0
14
776
-13,7
90
9,9
35
1,2
36
2,8
43
14,0
14
9,9
34
1,2
22
2,8
42
13,9
98
42,1
34
5,6
86
13
47,8
33
42,1
33
5,4
91
13
47,6
37
8,0
82
15,0
55
383
23,5
20
5,9
05
15,0
46
237
21,1
88
12,0
67
2,7
59
375
15,2
01
17,5
52
2,7
58
370
20,6
80
31,0
14
320
75
31,4
09
31,0
13
319
75
31,4
07
3,3
76
2,0
44
3,4
28
8,8
48
1,4
51
907
1,5
64
3,9
22
500,5
41
111,1
67
34,0
66
645,7
74
471,0
83
98,9
42
28,1
72
598,1
97
Gro
up
Ban
kTerm
loan
sO
verd
raft
Fin
an
ce
lease
receiv
ab
les
Tota
lTerm
loan
s
Overd
raft
Fin
an
ce
lease
receiv
ab
les
Tota
l
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
39
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
40
3.1.4 Analysis by security
Secured against real estate
Secured by shares
Cash collateral
Otherwise secured
Unsecured
Sensitivity of exposure at default to changes in loan loss impairment
a Sensitivity of exposure at default - probability at default (PD)
Increase
Decrease
b Sensitivity of exposure at default - loss given default (LGD)
Increase
Decrease
Exposure at default as stated on the statement of nancial position is subject to interplay of three keyvariables: probability of default, loss given default and emergence period. Therefore changes to these threekey variables would directly impact the exposure at default as at reporting date.
The Group carried out the following activities in assessing the sensitivity of the Group’s profit to fluctuationsin the probability of default and emergence period.
As at 31 December 2015, if the probability of default increased or decreased by 5%, with all other variables(exposure at default and loss given default) held constant, the impact on impairment charge, whichultimately affects loss before tax and exposure at default, would have been as set out in the tables below:
The Group in assessing the sensitivity of the Group’s profit to fluctuations in the loss given period, assumeda 5% change in the loss given default. The chosen change in the loss given default was then applied to thebank's loan portfolio as at end of the year.
As at 31 December 2015, if the loss given default increased or decreased by five percent, with all othervariables (exposure at default, probability of default and emergence period) held constant, the impact onimpairment charge, which ultimately affects loss before tax and exposure at default, would have been as setout in the tables below:
31 December 31 December 31 December 31 December
2015 2014 2015 2014
242,541 242,509 241,319 241,073
1,112 16,378 1,106 16,325
76,888 111,735 76,501 111,657
400,138 279,342 398,345 250,298
20,489 20,322 20,385 4,052
741,168 670,286 737,656 623,405
Group Bank
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Pre tax Pre tax Pre tax Pre tax
298 306 288 412
(567) (559) (577) (418)
(269) (253) (289) (6)
Group Bank
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Pretax Pretax Pretax Pretax
573 304 563 286
(567) (338) (577) (356)
6 (34) (14) (70)
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
NOTES TO THE FINANCIAL STATEMENTS
3. Financial risk management continued
3.1.5
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Neither past due nor impaired 602,099 567,850 599,288 519,857
Past due but not impaired 34,264 69,006 33,563 68,843
Past due and impaired 104,805 33,430 104,805 34,705
Gross 741,168 670,286 737,656 623,405
Less allowances for impairment
Specific impairment (24,487) (16,766) (25,678) (17,611)
Collective impairment (11,785) (7,746) (11,575) (7,597)
Total allowance (36,272) (24,512) (37,253) (25,208)
Net loans and advances 704,896 645,774 700,403 598,197
Each category of the gross loans and advances to customers is further analysed into product as follows:
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Term loans 478,146 466,935 475,960 431,110
Overdrafts 86,432 70,052 85,996 57,899
Finance lease receivables 37,521 30,863 37,332 30,848
Neither past due nor impaired 602,099 567,850 599,288 519,857
Term loans 26,790 45,012 26,242 44,849
Overdraft 7,440 23,830 7,288 23,830
Finance lease receivables 34 164 33 164
Past due but not impaired 34,264 69,006 33,563 68,843
Term loans 78,666 12,999 78,666 14,274
Overdrafts 18,573 20,300 18,573 20,300
Finance lease receivables 7,566 131 7,566 131
Past due and impaired 104,805 33,430 104,805 34,705
741,168 670,286 737,656 623,405
The table below analyses the Group's loans and advances to customers based on the categorization of the loans and the allowancestaken on them:
Group Bank
Group Bank
Total gross loans and advances to customers
Categorisation of loans and advances to customers
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
41
NOTES TO THE FINANCIAL STATEMENTS
The impairment on loans and advances to customers is further analysed as follows:
Specific impairment
Term loans
Overdrafts
Finance lease receivables
Collective impairment
Term loans
Overdrafts
Finance lease receivables
Total impairment loss
Individually assessed for
impairmentCollectively assessed for
impairment
Individually assessed for
impairmentCollectively assessed for
impairment
All cash and short term funds (balances held with central bank), due from banks and other nancial institutions, nancial assetsheld for trading - debt securities, investment securities - debt securities, asset pledged as collateral - debt securities are neitherpast due nor impaired except for other assets which has past due and impaired balance of Group - N10.745 Billion (2014: N3.640Billion) and Bank - N11.165 Billion (2014: N4,914Billion) while the remaining balance are neither past due nor impaired.
31 December 31 December 31 December 31 December
2015 2014 2015 2014
14,203 5,956 14,203 6,781
9,185 10,660 10,377 10,680
1,099 150 1,098 150
24,487 16,766 25,678 17,611
8,239 6,341 8,165 6,323
3,335 1,404 3,202 1,272
211 1 208 2
11,785 7,746 11,575 7,597
36,272 24,512 37,253 25,208
Group Bank
Carrying
value before
impairment
Allowance
for
impairment
Loans &
advances
net of
impairment
Carrying
value before
impairment
Allowance
for
impairment
Loans &
advances
net of
impairment
139,069 (24,487) 114,582 132,040 (16,766) 115,274
602,099 (11,785) 590,314 538,246 (7,746) 530,500
741,168 (36,272) 704,896 670,286 (24,512) 645,774
2015Group
2014
Carrying
value before
impairment
Allowance
for
impairment
Loans &
advances
net of
impairment
Carrying
value before
impairment
Allowance
for
impairment
Loans &
advances
net of
impairment
138,368 (25,678) 112,690 132,040 (17,611) 114,429
599,288 (11,575) 587,713 491,365 (7,597) 483,768
737,656 (37,253) 700,403 623,405 (25,208) 598,197
20142015Bank
Analysis of loans and advances by category of impairment
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
42
NOTES TO THE FINANCIAL STATEMENTS
3.
Fin
an
cia
lri
sk
man
ag
em
en
tco
nti
nu
ed
3.1
.6
Lo
an
san
dad
van
ce
sto
cu
sto
mers
IFR
S7
requir
es
that
the
gro
up
dis
close
info
rmatio
nabo
ut
the
credit
qualit
yo
fn
anci
al
ass
ets
that
are
neither
past
due
no
rim
paire
d.
This
info
rmatio
nis
pro
vid
ed
inth
eta
ble
sbe
low
for
loans
and
ad
vance
sto
cust
om
ers
.
Gro
up
Rati
ng
Descri
pti
on
In
tern
al
Rati
ng
Bu
cket
Term
loan
s
Overd
raft
sFin
an
ce
lease
receiv
ab
les
Tota
lTerm
loan
sO
verd
raft
sFin
an
ce
lease
receiv
ab
les
Tota
l
Investm
ent
Gra
de
AA
91,1
00
16,2
03
7,1
55
114,4
58
81,2
78
17,5
90
4,8
02
103,6
70
Investm
ent
Gra
de
A160,0
92
27,4
37
12,3
44
199,8
73
175,1
11
7,8
17
8,7
16
191,6
44
Investm
ent
Gra
de
BBB
139,9
09
24,3
96
10,5
43
174,8
48
138,9
68
19,4
47
11,8
27
170,2
42
Sub
Investm
ent
Gra
de
BB
45,8
28
8,1
81
3,6
06
57,6
15
43,6
05
7,4
45
3,7
29
54,7
79
Sub
Investm
ent
Gra
de
B24,4
42
6,1
45
2,3
17
32,9
04
16,6
85
3,5
06
994
21,1
85
Sub
Investm
ent
Gra
de
CCC
8,9
99
2,7
27
955
12,6
81
5,9
87
1,3
40
357
7,6
84
Sub
Investm
ent
Gra
de
Unra
ted
7,7
76
1,3
43
601
9,7
20
5,3
01
12,9
07
438
18,6
46
Tota
l4
78
,14
68
6,4
32
37
,52
16
02
,09
94
66
,93
57
0,0
52
30
,86
35
67
,85
0
31
Decem
ber
20
15
31
Decem
ber
20
14
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
43
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Ban
k
Rati
ng
Descri
pti
on
In
tern
al
Rati
ng
Bu
cket
Term
loan
s
Overd
raft
sFin
an
ce
lease
receiv
ab
les
Tota
lTerm
loan
sO
verd
raft
sFin
an
ce
lease
receiv
ab
les
Tota
l
Investm
ent
Gra
de
AA
90,6
19
16,1
18
7,1
55
113,8
92
80,6
30
16,9
41
4,8
02
102,3
73
Investm
ent
Gra
de
A159,2
46
27,2
92
12,3
44
198,8
82
146,3
41
7,8
17
8,7
16
162,8
74
Investm
ent
Gra
de
BBB
139,5
10
24,2
87
10,3
54
174,1
51
138,9
68
19,4
47
13,4
48
171,8
63
Sub
Investm
ent
Gra
de
BB
45,5
86
8,1
37
3,6
06
57,3
29
35,4
32
7,4
45
2,1
10
44,9
87
Sub
Investm
ent
Gra
de
B24,3
12
6,1
13
2,3
17
32,7
42
16,6
85
3,5
06
994
21,1
85
Sub
Investm
ent
Gra
de
CCC
8,9
51
2,7
12
955
12,6
18
5,9
87
1,2
58
357
7,6
02
Sub
Investm
ent
Gra
de
Unra
ted
7,7
36
1,3
37
601
9,6
74
7,0
67
1,4
85
421
8,9
73
Tota
l4
75
,96
08
5,9
96
37
,33
25
99
,28
84
31
,11
05
7,8
99
30
,84
85
19
,85
7
31
Decem
ber
20
15
31
Decem
ber
20
14
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
44
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
3.
Fin
an
cia
lri
sk
man
ag
em
en
tco
nti
nu
ed
3.1
.7C
red
itc
oll
ate
ral
i.P
as
td
ue
bu
tn
ot
imp
air
ed
risk
ass
ets
Oth
er
than
loans
and
advances,
no
oth
er
financia
lassets
are
past
due
but
not
impaired
as
at
31
Decem
ber
2015
(31
Decem
ber
2014:
Nil)
Past
due
but
not
impaired
loans
and
advance
s,oth
er
than
those
carr
ied
at
fair
valu
eth
rough
pro
tor
loss
,are
those
for
whic
hco
ntr
act
ual
inte
rest
or
prin
cipal
paym
en
tsare
past
due
but
the
Gro
up
belie
ves
that
impairm
en
tis
no
tappro
priate
on
the
basi
sof
the
level
of
secu
rity
/colla
tera
lavaila
ble
and/o
rth
est
age
of
colle
ctio
nof
am
ou
nts
ow
ed
toth
eG
roup.
The
agin
ganaly
sis
of
past
du
ebu
tn
ot
impaired
nan
cial
ass
ets
isas
show
nbelo
w:
Gro
up
0-
90
days
23,7
76
6,9
36
-13,0
93
9,5
74
164
91
-180
days
126
92
111,6
96
3,4
85
-
181
-365
days
2,8
88
412
33
20,2
23
10,7
71
-
365
and
above
--
--
--
26
,79
07
,44
03
44
5,0
12
23
,83
01
64
FV
of
coll
ate
ral
19,5
26
3,1
36
29
48,4
56
20,3
45
43
Am
ou
nt
of
un
der-
co
llate
rali
sati
on
7,2
64
4,3
04
5-
3,4
85
121
Ban
k
0-
90
days
23,2
90
6,7
94
-13,0
93
9,5
74
164
91
-180
days
123
90
111,5
33
3,4
85
-
181
-365
days
2,8
29
404
32
20,2
23
10,7
71
-
365
and
above
--
--
--
26
,24
27
,28
83
34
4,8
49
23
,83
01
64
FV
of
coll
ate
ral
19,5
26
3,1
36
29
48,4
56
20,3
45
43
Am
ou
nt
of
un
der-
co
llate
rali
sati
on
6,7
16
4,1
52
4-
3,4
85
121
31
Decem
ber
20
15
31
Decem
ber
20
14
31
Decem
ber
20
15
31
Decem
ber
20
14
Term
loan
sO
verd
raft
sFin
an
ce
lease
receiv
ab
les
Term
loan
sO
verd
raft
sFin
an
ce
lease
receiv
ab
les
Term
loan
sO
verd
raft
sFin
an
ce
lease
receiv
ab
les
Term
loan
sO
verd
raft
sFin
an
ce
lease
receiv
ab
les
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
45
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
3. Financial risk management continued
3.1.7 Credit collateral continued
i. Past due but not impaired risk assets continued
Collateral repossessed
ii. Past due and impaired risk assets
Gross loans
Term loans
Overdrafts
Finance lease receivables
Impairment
Term loans
Overdrafts
Finance lease receivables
Net amount
Term loans
Overdrafts
Finance lease receivables
FV of collateral
Term loans
Overdrafts
Finance lease receivables
Amount of under-collateralisation
Term loans
Overdrafts
Finance lease receivables
Amount of
undercollateralisation on
net loans
Upon initial recognition of loans and advances, the fair value of collateral is based on valuation techniquescommonly used for the corresponding assets. In subsequent periods, the fair value is assessed by reference tomarket price or indexes of similar assets.
The Group does not take physical possession of properties or other assets held as collateral and therefore therewas no repossessed collateral as at 31 December 2015 (31 December 2014: Nil). I n the unlikely event thatthe Group takes physical possession of an asset held as collateral, the asset will be carried on the Group'sbalance sheet and classied according to the Group's accounting policies.
Individually impaired loans and advances are loans for which the group determines that there is objectiveevidence of impairment and it does not expect to collect all principal and interest due according to thecontractual terms of the loan/investment security agreement(s). The breakdown of the gross amount ofindividually impaired loans and advances by class, along with the fair value of related collateral held by theGroup as security, are as follows:
31 December 31 December 31 December 31 December
2015 2014 2015 2014
78,666 12,999 78,666 15,389
18,573 20,300 18,573 19,166
7,566 131 7,566 150
104,805 33,430 104,805 34,705
(14,203) (5,956) (14,203) (6,781)
(9,185) (10,660) (10,377) (10,680)
(1,099) (150) (1,098) (150)
(24,487) (16,766) (25,678) (17,611)
65,654 7,043 64,463 8,608
8,196 9,640 8,196 8,486
6,468 (19) 6,468 -
80,318 16,664 79,127 17,094
45,810 33,792 45,810 13,011
6,917 49,168 6,917 18,931
5,256 - 5,256 -
57,983 82,960 57,983 31,942
32,856 - 32,856 2,378
11,656 - 11,656 235
2,310 131 2,310 150
46,822 131 46,822 2,763
22,334 - 21,143 -
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
46
NOTES TO THE FINANCIAL STATEMENTS
3.1.8 Summary of collaterals held against loans and advances to customers
Upon initial recognition of loans and advances, the fair value of collateral is based on valuation techniquescommonly used for the corresponding assets. In subsequent periods, the fair value is assessed by reference to
market price or indexes of similar assets.
An estimate of the fair value of any collateral and other security enhancements held against loans and advances
to customers and due from banks and other financial institution is shown below:
31 December 2015
Against past due and impaired
Against past due but not impaired
Against neither past due nor impaired
Total
31 December 2014
Against past due and impaired
Against past due but not impaired
Against neither past due nor impaired
Total
Against past due and impaired
Property
Equities
Treasury bills
Cash
Guarantees
Negative pledge
ATC, stock hypothecation and ISPO
Others
Total
Against past due but not impaired
Property
Others
Total
Gross
amount
Collateral Gross
amount
Collateral
104,805 57,983 104,805 57,983
34,264 22,690 33,563 22,690
602,099 447,262 599,288 447,262
741,168 527,935 737,656 527,935
Gross
amount
Collateral Gross
amount
Collateral
33,430 82,960 34,705 31,942
69,006 68,844 68,843 68,844
567,850 583,818 519,857 518,252
670,286 735,622 623,405 619,038
31 December 31 December 31 December 31 December
2015 2014 2015 2014
22,969 33,053 22,969 19,539
- 272 - 272
- - - -
- 66 - -
- 816 - 816
- - - -
- - - -
35,014 48,753 35,014 11,315
57,983 82,960 57,983 31,942
17,314 33,137 17,314 33,137
5,376 35,707 5,376 35,707
22,690 68,844 22,690 68,844
Group
Loans and advances to
customers
Loans and advances to
customers
Group
Loans and advances to
customers
Loans and advances to
customers
Group
Loans and advances to
customers
Loans and advances to
customers
Bank
Bank
Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
47
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
48
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
Against neither past due nor impaired
Property
Debt securities
Equities
Treasury bills
Cash
Guarantees
Negative pledge
ATC, stock hypothecation and ISPO
Others
Total
Grand total
Other than loans and advances, no collateral is held against other financial assets
124,854 101,467 124,854 64,076
- - - -
588 516 588 516
- - - -
73,179 10,035 73,179 9,688
21,205 11,005 21,205 11,005
- 15,545 - 15,545
- 85,600 - 85,600
227,436 359,650 227,436 331,822
447,262 583,818 447,262 518,252
527,935 735,622 527,935 619,038
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Group
Loans and advances to
customers
Loans and advances to
customers
Bank
3.
Fin
an
cia
lri
sk
man
ag
em
en
tco
nti
nu
ed
3.1
.9D
eb
tsecu
riti
es
The
table
belo
wshow
sanaly
sis
ofdebt
securities
into
the
di e
rent
cla
ssifi
cations:
The
Gro
up’s
investm
ent
inrisk-f
ree
Govern
ment
securities
constitu
tes
95%
ofdebt
instr
um
ents
port
folio
(Decem
ber
2014:
95%
).In
vestm
ent
incorp
ora
teand
euro
bonds
accounts
for
the
outs
tandin
g5%
(Decem
ber
2014:
5%
).The
Bank’s
investm
ent
inrisk-f
ree
Govern
ment
securities
constitu
tes
95%
ofdebt
instr
um
ents
port
folio
(Decem
ber
2014:
100%
)and
investm
ent
incorp
ora
teand
euro
bonds
accounts
for
the
outs
tandin
g5%
(Decem
ber
2014:
Nil).
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
31
Decem
ber
20
15
Federa
lgovern
ment
bonds
Sta
tegovern
ment
bonds
Corp
ora
tebonds
Tre
asury
bills
Euro
bond
31
Decem
ber
20
14
Federa
lgovern
ment
bonds
Sta
tegovern
ment
bonds
Corp
ora
tebonds
Tre
asury
bills
Euro
bonds
Fin
an
cia
l
assets
held
for
trad
ing
In
vestm
en
t
secu
riti
es
Assets
ple
dg
ed
as
co
llate
ral
Tota
lFin
an
cia
l
assets
held
for
trad
ing
In
vestm
en
t
secu
riti
es
Assets
ple
dg
ed
as
coll
ate
ral
Tota
l
-44,7
19
33,8
78
78,5
97
-42,0
14
33,8
78
75,8
92
-27,7
43
12,7
31
40,4
74
-26,8
24
12,7
31
39,5
55
-3,0
87
806
3,8
93
-2,9
75
806
3,7
81
131
11,3
72
21,2
86
32,7
89
131
3,6
45
21,2
86
25,0
62
-4,1
20
-4,1
20
-4,1
20
-4,1
20
13
19
1,0
41
68
,70
11
59
,87
31
31
79
,57
86
8,7
01
14
8,4
10
Fin
an
cia
l
assets
held
for
trad
ing
In
vestm
en
t
secu
riti
es
Assets
ple
dg
ed
as
co
llate
ral
Tota
lFin
an
cia
l
assets
held
for
trad
ing
In
vestm
en
t
secu
riti
es
Assets
ple
dg
ed
as
coll
ate
ral
Tota
l
5,0
68
37,4
04
34,3
19
76,7
91
-34,1
16
15,3
91
49,5
07
-25,0
98
11,0
21
36,1
19
-18,2
47
11,0
21
29,2
68
4,3
73
7,5
57
-11,9
30
-140
-140
6,6
14
87,7
75
44,8
30
139,2
19
1,3
84
38,5
71
7,6
54
47,6
09
-3,4
03
-3,4
03
--
--
16
,05
51
61
,23
79
0,1
70
26
7,4
62
1,3
84
91
,07
43
4,0
66
12
6,5
24
Gro
up
B
an
k
Gro
up
B
an
k
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
49
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
3.2 Liquidity Risk
3.2.1 Liquidity Risk Measurement
• Cash and balances with the Central Bank;
• Government Bonds and Treasury Bills
• Highly liquid instruments in the Group’s trading portfolio
Assets & Liability Mix 31 December 31 December
2015 2014
Asset components % Proportion % Proportion
Cash 4% 44,158 5% 44,765
Cash reserve 15% 153,415 24% 237,892
Treasury bills 0% 131 1% 6,614
FGN bonds & other certificates 6% 56,091 1% 5,068
Placements 1% 11,757 2% 15,166
Loans and advances 74% 741,168 67% 670,286
Total 100 1,006,720 100 979,791
Liability components % Proportion % Proportion
Current accounts 53% 324,020 51% 352,430
Savings accounts 23% 140,441 19% 129,591
Term deposits 24% 149,224 30% 210,221
Total 100 613,685 100 692,242
The measure of the Group’s liquidity is the ratio of its liquid assets to total customer deposits. The liquid assetsheld for managing liquidity risk comprise:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
50
NOTES TO THE FINANCIAL STATEMENTS
3. Financial risk management continued
3.3 Market risk3.3.1 Market risk measurement techniques
Exposure to market risks - trading portfolios
Given that the crystalisation of trading market risk exposure is instant in most cases, board approval trading policyremains a vital tool in managing exposures on a daily basis. The policy provides for both open posion and periodic losslimits across all traded instruments, while strict policy compliance is ensured on a real time basis with the aid ofauthomated, real-time trading platform.
Typically, the bank trades in the following nancial instruments:1. Treasury bills2. Bonds3. Foreign currencies4. Money market products
Below are some of the Key variables used in quantifying, monitoring, controlling and reporting market risk exposure(traded and non traded) across the group:
• Open position assessment: - for trading and currency risk exposures.• Value at Risk model (VaR) - for trading and currency risk exposures• Expected shortfall - for trading and currency risk exposures• Interest and exchange rate sensitivity - For balance sheet level interest and exchange rate exposures assessment• Stress testing - Both trading and non-trading exposures.
The Group applies a Value at Risk (VAR) methodology to its trading portfolios (including assets and liabilities that aredesignated at fair value) to estimate the market risk exposures of open positions.
VAR is a statistically based estimate of the potential loss on the current portfolio from adverse market movements. Itexpresses the ‘maximum’ amount the Group might lose, at certain level of condence (ofte 99%) given a time horizon(usually 1 day). There is therefore a specied statistical probability (1%) that actual loss may be greater than the VARestimate. The VAR model assumes a certain ‘holding period’ until positions can be closed (1 day). The likely estimate ofthe size of 1% expected violation of the VaR number is accessed via stress testing. VaR also assumes that marketmoves occurring over this holding period will follow a similar pattern to those that have occurred in the past.
Traded Instruments: The instruments the bank's trade in are strictly provided for in the trading policy which include:Federal Government securities and foreign currencies. The policy also claries requirements for trading in new productsas well as position and loss limits at dealers and product levels.
FGN Bond Trading: The Bank bond trading portfolio consists of about eight actively traded issues of varying maturities.The correlation between trading assets components reduced quite signicantly during the year (relative to the previousyear), resulting in an appreciable increase the consequential risk reduction benet on the portfolio from 11.6% in 2014to 7.2% in 2015. The portfolio highest VaR (99% condence interval, 1 day holding period) in the course of the yearwas 4.12%, lowest at 0.38% and average 1.29% of position size.
Treasury Bills Trading: The treasury bills portfolio highest VaR (99% condence interval, 1 day holding period) was1.81%, lowest at 0.21% and average 0.76% of position size. Relative to other traded instruments, the treasury billstrading portfolio risk prole is the lowest through the year.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
51
NOTES TO THE FINANCIAL STATEMENTS
Year 2015
Year 2014
Exposure to market risks - non-trading portfolios
Decrease
Assets
Liabilities
Increase
Assets
Liabilities
The table below shows the result of interest rate sensitivity by applying a change of a 100 basis points. The impact onprot or loss is as follows:
Non trading interest rate risk exposures are present on the Group’s balance sheet, resulting from disproportionateimpact o nterest rate changes on cash ows arising from asset and liability maturity mismatches. This holds potentialto impact the Group’s earnings.
Decisions on interest rate direction is the responsibility of the ALCO, who work with the risk team in the day to daymonitoring and forecasting of interest rate directions, based on macro-economic fundamentals, market dynamics andthe monetary authority objectives.
Exposure to interest rate risk is occasioned by maturity gap, hence this is managed via maturity gap analysis, earningat risk model, together with informed interest rate forecast.
FX Trading Activities: - The Bank currency trading activity is largely limited to trading Naira/USD currency pairthroughout the nancial year, and this also reduced the Bank’s market risk exposure occasioned by currency tradingactivities. Trading activities in USD/NGN currency pair recorded the highest VaR gure (99% condence interval oneday horizon) of 3.82% of the position size, minimum of 0.59% and average of 1.29%.
The integrity of the VAR model is validated via back-testing model over a reasonable period. Although a valuable guideto risk, VAR is always viewed in the context of its limitations i.e.
• The use of historical data as a proxy for estimating future events may not be reective of the growing complexitiesand changes in the interactions of market drivers.• The holding period assumption may also be awed particularly in times of market illiquidity when it takes muchlonger to liquidate positions• The likely size o osses under the permissible 1% violation is not stated, which might exceed the bank’s lossthreshold
In adjusting for these limitations, the Group has, in addition to stress testing, adopted the expected shortfall model, togain a statistical sense of the likely size of the extreme loss events. VaR is also assessed at 99% condence intervaland a 10-day holding period as additional stress factor.
BONDS Treasury bills FX
Maximum 4.12% 1.81% 3.82%
Minimum 0.38% 0.21% 0.59%
Average 1.29% 0.76% 1.29%
BONDS Treasury bills FX
Maximum 2.81% 1.17% 3.90%
Minimum 0.31% 0.11% 0.44%
Average 0.91% 0.34% 1.39%
VaR ANALYSIS
VaR ANALYSIS
31
December
31
December
31
December
31
December2015 2014 2015 2014
Pre tax Pre tax Pre tax Pre tax
(1,504) 6,715 (1,348) 6,676
(7,543) (9,092) (7,517) (9,052)
(9,047) (2,377) (8,865) (2,376)
1,504 (6,567) 1,348 (6,531)
7,543 8,884 7,517 8,884
9,047 2,317 8,865 2,353
BankGroup
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
52
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
NOTES TO THE FINANCIAL STATEMENTS
Components of Balance Sheet Interest Rate sensitivity
Decrease
Financial assets
Due from banks and other financial institutions
Loans and advances to customers
- Available for sale investments
- Held to maturity investments
- Loans and receivables investments
Assets pledged as collateral
Financial liabilities
Due to other financial institutions
Deposits from customers
Borrowings from local and foreign institutions
Total
Increase
Financial assets
Due from banks and other financial institutions
Loans and advances to customers
- Available for sale investments
- Held to maturity investments
- Loans and receivables investments
Assets pledged as collateral
Financial liabilities
Due to other financial institutions
Deposits from customers
Borrowings from local and foreign institutions
Total
At 31 December 2015, if interest rates had been 100 basis points higher/lower with all other variables held constant,other components of equity would have been N52 million lower for the Group (Bank: N8 million) mainly as a result of a
decrease/increase in the fair value o xed rate debt financial assets classified as available-for-sale.
The aggregated figures presented above are further analysed into their various components as shown in the following
tables:
31
December
31
December
31
December
31
December2015 2014 2015 2014
Pre tax Pre tax Pre tax Pre tax
(325) 540 (312) 540
(740) 5,177 (715) 5,165
(52) - (8) -
(126) 665 (58) 639
(28) - (22) -
(233) 333 (233) 332
(1,504) 6,715 (1,348) 6,676
290 115 278 115
6,528 7,776 6,514 7,736
725 1,201 725 1,201
7,543 9,092 7,517 9,052
(9,047) (2,377) (8,865) (2,376)
31
December
31
December
31
December
31
December2015 2014 2015 2014
325 (529) 312 (529)
740 (5,088) 715 (5,078)
52 - 8 -
126 (654) 58 (628)
28 - 22 -
233 (296) 233 (296)
1,504 (6,567) 1,348 (6,531)
(290) (113) (278) (113)
(6,528) (7,592) (6,514) (7,592)
(725) (1,179) (725) (1,179)
(7,543) (8,884) (7,517) (8,884)
9,047 2,317 8,865 2,353
Group Bank
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
53
NOTES TO THE FINANCIAL STATEMENTS
31
December
31
December
31
December
31
December
2015 2014 2015 2014
Pre tax Pre tax Pre tax Pre tax
Decrease 13 973 13 1,058
Increase (13) (973) (13) (1,058)
- - - -
3.4 Foreign exchange risk
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures
primarily with respect to the US dollar, UK pound and Euro. Foreign exchange risk represents exposures to changes in
the values of current holdings and future cash flows denominated in other currencies. The types ofi nstruments
exposed to this risk include investments in foreign subsidiaries, foreign currency-denominated loans and securities,
future cash flows in foreign currencies arising from foreign exchange transactions, foreign currency denominated debt.
In view of the current devaluation of naira, the bank also ensures that currency trading limits are in line with market
realities, foreign currency lending and funding is subject to approvals by top management. In this case the bank makes
use of limits and management action triggers for strict adherence to the Bank’s internal policies and risk appetite.Further, management ensures that repricing of the assets is in line with market realities.
The Group maintains strict policy guidance for all its foreign currency related activities, and Board approval is required
where business exigencies necessitate currency exposure creation, which must still be contained within permissible
threshold and adequately mitigated. The Group ensures that foreign currencies denominated assets are matched with
foreign currency denominated liabilities to reduce currency risk exposure (exchange exposure gap). Periodic reports on
the Group’s foreign currency exposure are rendered up to the Board level. In line with the Basel II provision, both
trading and non-trading currency exposures are treated as trading positions, and are therefore subject to fair valuation
relative to prevailing market exchange rate (mark-to-market).
Group Bank
Cash flow interest rate risk: This risk arises from the timing die rences of exposure ofi nterest rate sensitive assets and
liabilities to changes in market interest rates. The Group manages the cash flow interest rate risk by matching floating
rate assets to floating rate liabilities as much as feasible, while residual exposures are actively managed via die rent
market instruments including interest rate swaps where practicable.
At 31 December 2015, if interest rates on borrowed funds at amortised cost increased or reduced by 50 basis pointswith all other variables held constant, the e ect on profit or loss would have been as set out below:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
54
NOTES TO THE FINANCIAL STATEMENTS
3.
Fin
an
cia
lri
sk
man
ag
em
en
tco
nti
nu
ed
3.3
.2C
on
trac
tual
matu
rity
of
n
an
cia
las
sets
an
dli
ab
ilit
ies
Gro
ss
no
min
al
(un
dis
co
un
ted
)m
atu
riti
es
of
n
an
cia
lass
ets
an
dli
ab
ilit
ies
The
follow
ing
table
sshow
the
undis
counte
dcashflow
son
the
Gro
up's
financia
lassets
and
liabilitie
sand
on
the
basis
ofth
eir
earlie
st
possib
lecontr
actu
alm
atu
rity
.The
gro
ss
nom
inalin
flow
/(outfl
ow
)dis
clo
sed
inth
eta
ble
isth
econtr
actu
al,
undis
counte
dcash
flow
on
the
financia
lassets
and
liabilitie
s:
Gro
up
31
Decem
ber
20
15
Carr
yin
g
am
ou
nt
Gro
ss
nom
inal
infl
ow
/(ou
tflow
)
Less
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
205,1
47
205,1
47
205,1
47
--
--
Due
from
banks
and
oth
er
financia
lin
stitu
tions
37,0
31
37,0
31
37,0
31
--
--
Fin
ancia
lassets
held
for
tradin
g344
349
286
50
13
--
Derivative
financia
lassets
178
178
178
--
--
Loans
and
advances
tocusto
mers
704,8
96
1,2
21,3
25
71,4
34
8,4
19
24,2
45
237,5
41
879,6
86
-Available
for
sale
investm
ents
14,8
75
19,2
15
5,1
55
-2,8
39
-11,2
21
-H
eld
tom
atu
rity
investm
ents
50,7
56
108,7
54
12,9
07
874
2,9
86
14,0
32
77,9
55
-Loans
and
receiv
able
sin
vestm
ents
34,9
49
52,3
25
285
2,9
99
2,4
54
40,2
31
6,3
56
Assets
ple
dged
as
collate
ral
68,7
01
125,1
97
22,5
54
3,5
37
5,0
51
16,2
05
77,8
50
Oth
er
assets
1,3
60
1,3
60
1,3
60
--
--
1,1
18
,23
71
,77
0,8
81
35
6,3
37
15
,87
93
7,5
88
30
8,0
09
1,0
53
,06
8
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
33,1
10
33,1
10
33,1
10
--
--
Deposits
from
custo
mers
753,1
45
763,3
08
722,9
95
23,3
89
16,9
24
--
Derivative
financia
lliabilitie
s335
335
335
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
233,1
57
42,7
67
54,0
03
4,1
99
34,5
79
97,6
09
Oth
er
financia
lliabilitie
s78,5
88
78,5
88
78,5
88
--
--
1,0
81
,62
61
,10
8,4
98
87
7,7
95
77
,39
22
1,1
23
34
,57
99
7,6
09
Gap
(asset
-li
ab
ilit
ies)
36
,61
16
62
,38
3(5
21
,45
8)
(6
1,5
13
)1
6,4
65
27
3,4
30
95
5,4
59
Cu
mu
lati
ve
liq
uid
ity
gap
--
(5
21
,45
8)
(5
82
,97
1)
(5
66
,50
6)
(2
93
,07
6)
66
2,3
83
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
55
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Gro
up
31
Decem
ber
20
14
Carr
yin
g
am
ou
nt
Gro
ss
nom
inal
infl
ow
/(ou
tflow
)
Less
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
300,6
44
300,6
43
262,0
74
--
38,5
69
-
Due
from
banks
and
oth
er
financia
lin
stitu
tions
72,9
78
75,5
02
75,5
02
--
--
Fin
ancia
lassets
held
for
tradin
g18,2
83
19,5
34
11,6
82
4,3
73
1,2
51
-2,2
28
Loans
and
advances
tocusto
mers
645,7
74
730,7
80
147,5
77
44,9
34
85,6
36
344,4
36
108,1
97
-Available
for
sale
investm
ents
8,4
14
19,8
99
11,6
71
97
157
244
7,7
30
-H
eld
tom
atu
rity
investm
ents
125,1
01
318,2
99
55,7
89
63,3
65
50,0
45
44,0
20
105,0
80
-Loans
and
receiv
able
sin
vestm
ents
36,0
58
67,7
23
503
3,6
05
4,5
89
47,2
54
11,7
72
Assets
ple
dged
as
collate
ral
90,1
70
120,4
60
63,2
10
9,5
67
3,6
77
25,7
71
18,2
35
Oth
er
assets
6,4
73
6,4
73
6,4
73
--
--
1,3
03
,89
51
,65
9,3
13
63
4,4
81
12
5,9
41
14
5,3
55
50
0,2
94
25
3,2
42
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
51,8
16
52,1
85
51,8
31
--
354
-
Deposits
from
custo
mers
952,3
02
981,2
08
940,3
14
24,6
62
15,9
15
317
-
Derivative
financia
lliabilitie
s288
288
288
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
131,2
79
134,7
96
78,8
69
20,3
22
13,1
59
12,8
02
9,6
44
Oth
er
financia
lliabilitie
s97,9
66
140,1
40
139,7
86
--
354
-
Lia
bilitie
son
investm
ent
contr
acts
26
26
16
--
10
-
1,2
33
,67
71
,30
8,6
43
1,2
11
,10
44
4,9
84
29
,07
41
3,8
37
9,6
44
Gap
(asset
-li
ab
ilit
ies)
70
,21
83
50
,67
0(5
76
,62
3)
80
,95
71
16
,28
14
86
,45
72
43
,59
8
Cu
mu
lati
ve
liq
uid
ity
gap
--
(5
76
,62
3)
(4
95
,66
6)
(3
79
,38
5)
10
7,0
72
35
0,6
70
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
56
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Gro
ss n
om
inal (u
nd
isco
un
ted
) m
atu
riti
es o
f
nan
cia
l as
sets
an
d l
iab
ilit
ies c
on
tin
ued
Ban
k
31
Decem
ber
20
15
Carr
yin
g
am
ou
nt
Gro
ss
nom
inal
infl
ow
/(ou
tflow
)
Less
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
202,7
25
202,7
25
202,7
25
--
--
Due
from
banks
and
oth
er
financia
lin
stitu
tions
35,6
17
35,6
17
35,6
17
--
--
Fin
ancia
lassets
held
for
tradin
g131
134
72
49
13
--
Loans
and
advances
tocusto
mers
700,4
03
1,2
16,2
75
68,9
96
8,0
80
23,3
64
236,1
48
879,6
87
-Available
for
sale
investm
ents
9,8
12
10,0
30
183
-2,6
63
-7,1
84
-H
eld
tom
atu
rity
investm
ents
43,0
31
101,0
29
5,1
82
874
2,9
86
14,0
32
77,9
55
-Loans
and
receiv
able
sin
vestm
ents
33,9
19
51,2
95
285
2,1
69
2,4
54
40,2
31
6,1
56
Assets
ple
dged
as
collate
ral
68,7
01
125,1
97
22,5
54
3,5
37
5,0
51
16,2
05
77,8
50
Oth
er
assets
7,0
95
7,0
95
7,0
95
--
--
1,1
01
,43
41
,74
9,3
97
34
2,7
09
14
,70
93
6,5
31
30
6,6
16
1,0
48
,83
2
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
31,7
66
32,2
13
32,2
13
--
--
Deposits
from
custo
mers
754,8
82
760,3
96
722,9
20
21,7
43
15,7
33
--
Derivative
financia
lliabilitie
s335
335
335
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
233,1
57
42,7
67
54,0
03
4,1
99
34,5
79
97,6
09
Oth
er
financia
lliabilitie
s74,1
41
74,1
41
74,1
41
--
--
1,0
77
,57
21
,10
0,2
42
87
2,3
76
75
,74
61
9,9
32
34
,57
99
7,6
09
Gap
(asset
-li
ab
ilit
ies)
23
,86
26
49
,15
5(5
29
,66
7)
(6
1,0
37
)1
6,5
99
27
2,0
37
95
1,2
23
Cu
mu
lati
ve
liq
uid
ity
gap
-(5
29
,66
7)
(5
90
,70
4)
(5
74
,10
5)
(3
02
,06
8)
64
9,1
55
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
57
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Gro
ss n
om
inal (u
nd
isco
un
ted
) m
atu
riti
es o
f
nan
cia
l assets
an
d l
iab
ilit
ies c
on
tin
ued
Ban
k
31
Decem
ber
20
14
Carr
yin
g
am
ou
nt
Gro
ss
nom
inal
infl
ow
/(ou
tflow
)
Less
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
251,8
05
251,8
05
251,8
05
--
--
Due
from
banks
and
oth
er
financia
lin
stitu
tions
56,1
14
58,6
38
58,6
38
--
--
Fin
ancia
lassets
held
for
tradin
g1,3
84
1,5
12
209
52
1,2
51
--
Loans
and
advances
tocusto
mers
598,1
97
688,0
66
135,8
01
37,8
13
81,8
51
331,8
27
100,7
74
-Available
for
sale
investm
ents
2,7
18
2,7
18
--
--
2,7
18
-H
eld
tom
atu
rity
investm
ents
72,6
87
259,7
28
28,6
87
51,2
86
43,2
49
38,1
04
98,4
02
-Loans
and
receiv
able
sin
vestm
ents
18,3
87
67,7
23
503
3,6
05
4,5
89
47,2
54
11,7
72
Assets
ple
dged
as
collate
ral
34,0
66
64,4
66
7,2
16
9,5
67
3,6
77
25,7
71
18,2
35
Oth
er
assets
6,5
94
6,5
94
6,5
94
--
--
1,0
41
,95
21
,40
1,2
50
48
9,4
53
10
2,3
23
13
4,6
17
44
2,9
56
23
1,9
01
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
12,4
98
12,5
13
12,5
13
--
--
Deposits
from
custo
mers
818,4
57
847,3
31
810,5
77
21,5
64
14,8
73
317
Derivative
financia
lliabilitie
s288
288
288
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
124,9
67
128,4
83
78,3
27
20,3
22
13,1
59
10,2
53
6,4
22
Oth
er
financia
lliabilitie
s112,2
09
112,2
09
112,2
09
--
--
1,0
68
,41
91
,10
0,8
24
1,0
13
,91
44
1,8
86
28
,03
21
0,5
70
6,4
22
Gap
(asset
-li
ab
ilit
ies)
(2
6,4
67
)3
00
,42
6(5
24
,46
1)
60
,43
71
06
,58
54
32
,38
62
25
,47
9
Cu
mu
lati
ve
liq
uid
ity
gap
-(5
24
,46
1)
(4
64
,02
4)
(3
57
,43
9)
74
,94
73
00
,42
6
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
58
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Gro
ss n
om
inal (u
nd
isco
un
ted
) m
atu
riti
es o
f
nan
cia
l as
sets
an
d l
iab
ilit
ies c
on
tin
ued
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
The
table
belo
win
dic
ate
sth
eearlie
st
tim
eth
eG
roup
can
vary
the
term
softh
eunderlyin
gfinancia
lasset
or
liabilitie
sand
analy
ze
the
Gro
up’s
inte
rest
rate
risk
exposure
on
assets
and
liabilitie
sw
hic
hare
inclu
ded
at
carr
yin
gam
ount
and
cate
gorised
by
the
earlie
rofcontr
actu
alre
–pricin
gor
matu
rity
date
s.
Gro
up
31
Decem
ber
20
15
Carr
yin
g
am
ou
nt
Tota
lLess
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
205,1
47
205,1
47
205,1
47
--
--
Due
from
banks
and
oth
er
financia
lin
stitu
tions
37,0
31
37,0
31
37,0
31
--
--
Fin
ancia
lassets
held
for
tradin
g344
344
284
48
12
--
Derivative
financia
lassets
178
178
178
--
--
Loans
and
advances
tocusto
mers
704,8
96
704,8
96
70,2
12
7,9
93
21,8
39
167,4
92
437,3
60
-Available
for
sale
investm
ents
14,8
75
14,8
75
5,0
83
-2,6
08
-7,1
84
-H
eld
tom
atu
rity
investm
ents
50,7
56
50,7
56
11,3
51
-634
10,8
93
27,8
78
-Loans
and
receiv
able
sin
vestm
ents
34,9
49
34,9
49
1,0
29
--
28,4
77
5,4
43
Assets
ple
dged
as
collate
ral
68,7
01
68,7
01
20,3
40
945
1,1
62
14,1
46
32,1
08
Oth
er
assets
1,3
60
1,3
60
1,3
60
--
--
1,1
18
,23
71
,11
8,2
37
35
2,0
15
8,9
86
26
,25
52
21
,00
85
09
,97
3
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
33,1
10
33,1
10
33,1
10
--
--
Deposits
from
custo
mers
753,1
45
753,1
45
713,9
01
22,9
52
16,2
92
--
Derivative
financia
lliabilitie
s335
335
335
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
216,4
48
50,1
37
39,5
54
10,4
42
32,1
16
84,1
99
Oth
er
financia
lliabilitie
s78,5
88
78,5
88
78,5
88
--
--
1,0
81
,62
61
,08
1,6
26
87
6,0
71
62
,50
62
6,7
34
32
,11
68
4,1
99
36
,61
13
6,6
11
(5
24
,05
6)
(5
3,5
20
)(4
79
)1
88
,89
24
25
,77
4
Rep
ricin
g p
eri
od
of
n
an
cia
l assets
an
d lia
bilit
ies
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
59
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Gro
up
31
Decem
ber
20
14
Carr
yin
g
am
ou
nt
Tota
lLess
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
300,6
44
300,6
44
262,0
74
--
38,5
70
-
Due
from
banks
and
oth
er
financia
lin
stitu
tions
72,9
78
72,9
78
72,9
78
--
--
Fin
ancia
lassets
held
for
tradin
g18,2
83
18,2
83
12,7
33
4,4
22
1,1
28
--
Loans
and
advances
tocusto
mers
645,7
74
645,7
74
149,7
60
32,8
71
72,9
27
297,7
43
92,4
73
-Available
for
sale
investm
ents
8,4
14
8,4
14
78
8,3
36
-H
eld
tom
atu
rity
investm
ents
125,1
01
125,1
01
40,4
22
30,8
41
7,3
16
12,8
90
33,6
32
-Loans
and
receiv
able
sin
vestm
ents
36,0
58
36,0
58
36,0
58
--
--
Assets
ple
dged
as
collate
ral
90,1
70
90,1
70
15,0
72
33,7
63
4,5
37
17,4
16
19,3
82
Oth
er
assets
6,4
73
6,4
73
6,4
73
--
--
1,3
03
,89
51
,30
3,8
95
59
5,6
48
10
1,8
97
85
,90
83
66
,61
91
53
,82
3
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
51,8
16
51,8
16
51,8
16
--
--
Deposits
from
custo
mers
952,3
02
952,3
02
914,0
55
23,1
66
14,7
93
288
-
Derivative
financia
lliabilitie
s288
288
288
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
131,2
79
131,2
79
131,2
79
--
--
Oth
er
financia
lliabilitie
s97,9
66
97,9
66
97,6
02
--
364
-
Lia
bilitie
son
investm
ent
contr
acts
26
26
26
--
--
1,2
33
,67
71
,23
3,6
77
1,1
95
,06
62
3,1
66
14
,79
36
52
-
70
,21
87
0,2
18
(5
99
,41
8)
78
,73
17
1,1
15
36
5,9
67
15
3,8
23
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
60
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Rep
ricin
g p
eri
od
of
n
an
cia
l assets
an
d lia
bilit
ies
Ban
k
31
Decem
ber
20
15
Carr
yin
g
am
ou
nt
Tota
lLess
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
202,7
25
202,7
25
202,7
25
--
--
Due
from
banks
and
oth
er
financia
lin
stitu
tions
35,6
17
35,6
17
35,6
17
--
--
Fin
ancia
lassets
held
for
tradin
g131
131
71
48
12
--
Loans
and
advances
tocusto
mers
700,4
03
700,4
03
68,5
47
6,9
41
21,0
45
166,5
10
437,3
60
-Available
for
sale
investm
ents
9,8
12
9,8
12
20
-2,6
08
-7,1
84
-H
eld
tom
atu
rity
investm
ents
43,0
31
43,0
31
3,6
26
-634
10,8
93
27,8
78
-Loans
and
receiv
able
sin
vestm
ents
33,9
19
33,9
19
--
-28,4
77
5,4
42
Assets
ple
dged
as
collate
ral
68,7
01
68,7
01
20,3
40
945
1,1
62
14,1
46
32,1
08
Oth
er
assets
7,0
95
7,0
95
7,0
95
--
--
1,1
01
,43
41
,10
1,4
34
33
8,0
41
7,9
34
25
,46
12
20
,02
65
09
,97
2
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
31,7
66
31,7
66
31,7
66
--
--
Deposits
from
custo
mers
754,8
82
754,8
82
718,4
00
21,3
36
15,1
46
--
Derivative
financia
lliabilitie
s335
335
335
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
216,4
48
50,1
37
39,5
54
10,4
42
32,1
16
84,1
99
Oth
er
financia
lliabilitie
s74,1
41
74,1
41
74,1
41
--
--
1,0
77
,57
21
,07
7,5
72
87
4,7
79
60
,89
02
5,5
88
32
,11
68
4,1
99
23
,86
22
3,8
62
(5
36
,73
8)
(5
2,9
56
)(1
27
)1
87
,91
04
25
,77
3
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
61
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Rep
ricin
g p
eri
od
of
n
an
cia
l assets
an
d lia
bilit
ies
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
Ban
k
31
Decem
ber
20
14
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
251,8
05
251,8
05
251,8
05
--
--
56,1
14
56,1
14
56,1
14
--
--
Fin
ancia
lassets
held
for
tradin
g1,3
84
1,3
84
1,3
84
--
--
Loans
and
advances
tocusto
mers
598,1
97
598,1
97
117,1
81
32,6
28
70,6
71
286,3
29
91,3
88
-Available
for
sale
investm
ents
2,7
18
2,7
18
--
--
2,7
18
-H
eld
tom
atu
rity
investm
ents
72,6
87
72,6
87
19,3
47
18,7
61
650
6,9
74
26,9
55
-Loans
and
receiv
able
sin
vestm
ents
18,3
87
18,3
87
18,3
87
--
--
Assets
ple
dged
as
collate
ral
34,0
66
34,0
66
6,4
29
7,5
93
1,2
26
12,1
25
6,6
93
Oth
er
assets
6,5
94
6,5
94
6,5
94
--
--
1,0
41
,95
21
,04
1,9
52
47
7,2
41
58
,98
27
2,5
47
30
5,4
28
12
7,7
54
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
12,4
98
12,4
98
12,4
98
--
--
Deposits
from
custo
mers
818,4
57
818,4
57
785,0
45
19,6
03
13,5
21
288
-
Derivative
financia
lliabilitie
s288
288
288
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
124,9
67
124,9
67
36,0
67
88,9
00
--
-
Oth
er
financia
lliabilitie
s112,2
09
112,2
09
112,2
09
--
--
1,0
68
,41
91
,06
8,4
19
94
6,1
07
10
8,5
03
13
,52
12
88
-
(2
6,4
67
)(2
6,4
67
)(4
68
,86
6)
(4
9,5
21
)5
9,0
26
30
5,1
40
12
7,7
54
Due
from
banks
and
oth
er
financia
l
institu
tions
Carr
yin
g
am
ou
nt
Tota
lLess
than
90
days
91
-1
80
days
18
1-
36
5
days
Over
1year
bu
tle
ss
than
5years
Over
5years
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
62
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Rep
ricin
g p
eri
od
of
n
an
cia
l assets
an
d lia
bilit
ies
3.
Fin
an
cia
lri
sk
man
ag
em
en
tcon
tin
ued
The
table
belo
wsum
mari
zes
the
Gro
up's
financia
lassets
and
financia
lliabilitie
sat
gro
ss
am
ount,
cate
gori
sed
by
curr
ency:
Fin
an
cia
lin
str
um
en
tsb
ycu
rren
cy
Gro
up
31
Decem
ber
20
15
Tota
lN
air
aU
SD
GB
PEu
roO
thers
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
205,1
47
201,8
13
1,0
92
119
140
1,9
83
Due
from
banks
and
oth
er
financia
lin
stitu
tions
37,0
31
14,4
24
15,4
29
748
2,1
23
4,3
07
Fin
ancia
lassets
held
for
tradin
g344
344
--
--
Derivative
financia
lassets
178
-178
--
-Loans
and
advances
tocusto
mers
741,1
68
457,1
11
281,4
03
29
108
2,5
17
-Available
for
sale
investm
ents
14,8
75
12,1
70
2,7
05
--
-H
eld
tom
atu
rity
investm
ents
50,7
56
45,5
12
--
-5,2
44
-Loans
and
receiv
able
sin
vestm
ents
34,9
49
34,9
49
--
--
Assets
ple
dged
as
collate
ral
68,7
01
68,7
01
--
--
Oth
er
assets
1,3
60
875
82
--
403
1,1
54,5
09
835,8
99
300,8
89
896
2,3
71
14,4
54
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
33,1
10
29,7
66
3,3
44
--
-D
eposits
from
custo
mers
753,1
45
611,1
59
133,1
35
2,1
56
4,7
09
1,9
86
Derivative
financia
lliabilitie
s335
-335
--
-Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
134,6
34
81,8
14
--
-O
ther
liabilitie
s78,5
88
60,9
21
16,7
95
--
872
1,0
81,6
26
836,4
80
235,4
23
2,1
56
4,7
09
2,8
58
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
63
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Fin
an
cia
lin
str
um
en
tsb
ycu
rren
cy
Gro
up
31
Decem
ber
20
14
Tota
lN
air
aU
SD
GB
PEu
roO
thers
Fin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
300,6
44
289,1
60
7,7
50
668
1,0
48
2,0
18
Due
from
banks
and
oth
er
financia
lin
stitu
tions
72,9
78
16,5
74
50,8
69
1,8
78
3,0
52
605
Fin
ancia
lassets
held
for
tradin
g18,2
83
18,2
83
--
--
Loans
and
advances
tocusto
mers
670,2
86
391,6
81
276,8
41
35
143
1,5
86
-Available
for
sale
investm
ents
8,4
14
8,4
14
--
--
-H
eld
tom
atu
rity
investm
ents
125,1
01
118,1
47
3,7
02
--
3,2
52
-Loans
and
receiv
able
sin
vestm
ents
36,0
58
36,0
58
--
--
Assets
ple
dged
as
collate
ral
90,1
70
90,1
70
--
--
Oth
er
assets
6,4
73
6,4
73
--
--
1,3
28,4
07
974,9
59
339,1
62
2,5
81
4,2
43
7,4
61
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
51,8
16
51,8
16
--
--
Deposits
from
custo
mers
952,3
02
687,8
00
251,0
25
3,7
22
6,8
03
2,9
52
Derivative
financia
lliabilitie
s288
-288
--
-Borr
ow
ings
from
localand
fore
ign
institu
tions
131,2
79
25,4
66
105,8
13
--
-O
ther
liabilitie
s64,1
57
55,4
95
7,8
50
--
812
1,1
99,8
42
820,5
77
364,9
76
3,7
22
6,8
03
3,7
64
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
64
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Fin
an
cia
lin
str
um
en
tsb
ycu
rren
cy
Ban
k
31
Decem
ber
20
15
Tota
lN
air
aU
SD
GB
PEu
roFin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
202,7
25
201,8
13
766
91
55
Due
from
banks
and
oth
er
financia
lin
stitu
tions
35,6
17
14,2
02
18,6
60
718
2,0
37
Fin
ancia
lassets
held
for
tradin
g131
131
--
-Loans
and
advances
tocusto
mers
737,6
56
457,1
10
280,4
09
29
108
-Available
for
sale
investm
ents
9,8
12
9,0
16
796
--
-H
eld
tom
atu
rity
investm
ents
43,0
31
43,0
31
--
--
Loans
and
receiv
able
sin
vestm
ents
33,9
19
29,7
99
4,1
20
--
Assets
ple
dged
as
collate
ral
68,7
01
68,7
01
--
-O
ther
assets
7,0
95
7,0
95
--
-
1,1
38,6
87
830,8
98
304,7
51
838
2,2
00
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
31,7
66
21,0
29
10,7
37
--
Deposits
from
custo
mers
754,8
82
615,7
33
132,3
69
2,1
31
4,6
49
Derivative
financia
lliabilitie
s335
-335
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
134,6
34
81,8
14
--
Oth
er
liabilitie
s74,1
41
57,4
07
16,7
34
--
1,0
77,5
72
828,8
03
241,9
89
2,1
31
4,6
49
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
65
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Fin
an
cia
lin
str
um
en
tsb
ycu
rren
cy
Ban
k
31
Decem
ber
20
14
Tota
lN
air
aU
SD
GB
PEu
roFin
an
cia
lassets
Cash
and
bala
nces
with
centr
albanks
251,8
05
248,6
01
2,4
70
433
301
Due
from
banks
and
oth
er
financia
lin
stitu
tions
56,1
14
8,2
11
42,9
73
1,8
78
3,0
52
Fin
ancia
lassets
held
for
tradin
g1,3
84
1,3
84
--
-Loans
and
advances
tocusto
mers
623,4
05
353,5
95
269,6
32
35
143
-Available
for
sale
investm
ents
2,7
18
2,7
18
--
--
Held
tom
atu
rity
investm
ents
72,6
87
72,6
87
--
--
Loans
and
receiv
able
sin
vestm
ents
18,3
87
18,3
87
--
-Assets
ple
dged
as
collate
ral
34,0
66
34,0
66
--
-O
ther
assets
6,5
94
6,5
94
--
-
1,0
67,1
60
746,2
43
315,0
75
2,3
46
3,4
96
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
12,4
98
12,4
98
--
-D
eposits
from
custo
mers
818,4
57
566,3
89
242,0
53
3,4
11
6,6
04
Derivative
financia
lliabilitie
s288
-288
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
124,9
67
19,1
54
105,8
13
--
Oth
er
liabilitie
s112,2
09
104,3
54
7,8
50
--
1,0
68,4
19
702,4
00
356,0
04
3,4
11
6,6
04
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
66
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
3. Financial risk management continued
Sensitivity of foreign exchange currencies and impact on prot and equity
Dollar
Naira strengthens
Naira weakens
Pounds
Naira strengthens
Naira weakens
Euro
Naira strengthens
Naira weakens
Sensitivity analysis of derivative valuations
The Group carried out the following in determining sensitivity of the Group's profit to fluctuations in exchange rate
of foreign currencies:- Daily foreign exchange rates were obtained and trended
- A reasonably possible change of +/-N1 was determined based on the distribution of one year daily change in
exchange rates.
- The chosen reasonable change in exchange rates was then applied to the bank's foreign currency position as
at end of the period.
At 31 December 2015, a change of +/-N1 against the foreign currency with all other variables held constant, the
loss for the year would have increased/(decreased) as set out in the table below mainly as a result of foreignexchange gains or losses on the translation.
The fair value of interest rate swap contracts varies largely due to changes in LIBOR rates. On the swap contract,the group is long 3M Libor and short fixed rate, resulting in favourable impact when Libor rises and vice versa.
Holding other variables constant, the impact of +/-5 basis points (5bps) in Libor move was assessed. over the last
five years that the contract has been running, 3M Libor move have not exceeded 15bps, hence the choice of 5bps
sensitivity assessment. The table summarizes our derivatives financial instruments and analyzes the sensitivity of
their fair values to an immediate change in LIBOR rate. The liability (fair value) reduced to N 307 milllion from
N336 million ( 2014: N252 from N288 million) given a 5 bps increase in Libor rate.
The following table summarizes our derivative financial instruments and analyzes the sensitivity of their fair values
to an immediate change in LIBOR rate. The impact on profit or loss is as follows:
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Pre tax Pre tax Pre tax Pre tax
(336) 138 (322) 230
336 (138) 322 (230)
(4) 4 4 (4)
4 (4) (4) 4
(11) 13 11 (15)
11 (13) (11) 15
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
67
NOTES TO THE FINANCIAL STATEMENTS
3.
Fin
an
cia
lri
sk
man
ag
em
en
tco
nti
nu
ed
Tota
ld
eri
vati
ves
Gro
up
an
dB
an
k
31
Decem
ber
20
15
Favoura
ble
changes
(pre
-
tax)
Unfa
voura
ble
changes
(pre
-
tax)
Favoura
ble
changes
(post-
tax)
Unfa
voura
ble
changes
(post-
tax)
Notional
contr
act
am
ount
Asset
Lia
bility
Fair
valu
e
changes
to:
Fair
valu
e
changes
to:
Fair
valu
e
changes
to:
Fair
valu
e
changes
to:
Derivative
financia
lassets
/(liabilitie
s)
USD
100M
illion
-(3
35)
(307)
(364)
(314)
(368)
31
Decem
ber
20
14
Favoura
ble
changes
(pre
-
tax)
Unfa
voura
ble
changes
(pre
-
tax)
Favoura
ble
changes
(post-
tax)
Unfa
voura
ble
changes
(post-
tax)
Notional
contr
act
am
ount
Asset
Lia
bility
Fair
valu
e
changes
to:
Fair
valu
e
changes
to:
Fair
valu
e
changes
to:
Fair
valu
e
changes
to:
Derivative
financia
lassets
/(liabilitie
s)
USD
100M
illion
-(2
88)
(252)
(317)
(262)
(323)
Fair
valu
e
Fair
valu
e
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
68
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
4 Capital Management
Capital Risk Management
Capital management is central to the Group’s nancial stability and sustainability. The Group endeavours to maintain the
appropriate level of capital that is adequate to support our risk prole, regulatory requirements and business needs.
The Group’s Capital management philosophy is to optimize its capital structure given the peculiarities of its risk profile, by
maintaining adequate levels of capital to cater for all unexpected losses, beyond meeting regulatory requirements. This
philosophy guides the Group's Internal Capital Adequacy Assessment Process (ICAAP), which sets internal capital targets and
denes strategies for achieving those targets consistent with our risk appetite, business plans and operating environment.
As part of this process, we have implemented a program of enterprise-wide stress testing to evaluate the income and capital
(economic and regulatory) impacts of several potential stress events.
In the Group, capital allocations are approved at the Board level and are monitored daily by the Group’s management.
The Central Bank of Nigeria (CBN) has an oversight function and monitors all banks operating in Nigeria to ensure
compliance with capital adequacy requirements. At every point in time, the Group ensures that it has sufcient capital above
the regulatory capital to hedge against any unanticipated shocks.
The Group’s regulatory capital comprises of two tiers:
• Tier 1 capital: share capital (net of any book values of the treasury shares), statutory reserve, non-controlling interest,
retained earnings, reserves created by appropriations of retained earnings and other disclosed reserves. The book value of
goodwill is deducted in arriving at Tier 1 capital.
• Tier 2 capital: qualifying subordinated debt, unrealized gains arising on the fair valuation of equity instruments held as
available for sale. Investments in capital of other banks and nancial institutions are deducted from Tier 1 and Tier 2 capital
to arrive at the regulatory capital.
Capital adequacy ratio
The capital adequacy ratio is the quotient of the capital base of the Group and the Group's risk weighted asset base. The
Central Bank of Nigeria prescribed a minimum limit of 15% of total qualifying capital/total risk weighted capital/total risk
weighted assets as a measure of capital adequacy
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
69
NOTES TO THE FINANCIAL STATEMENTS
31
December
31
December
31
December
31
December
2015 2014 2015 2014
Tier 1 capital
Share capital 6,940 6,609 6,940 6,609
Share premium 65,548 65,548 65,548 65,548
Statutory reserves 15,958 15,822 15,721 15,721
SMEEIS reserve 1,854 1,854 1,854 1,854
Capital reserve 7,503 7,503 7,503 7,503
Regulatory reserve - 23 - -
Minority interest 927 764 - -
Retained earnings (6,825) 42,662 (17,134) 32,225
Total 91,905 140,785 80,432 129,460
Add/(less)
Intangible assets (3,076) (3,871) (3,066) (1,962)
Exposure to own financial holding company - (1,342) - -
Goodwill - (30,710) - -
Deferred tax asset (481) (463) - -
Excess exposure(s) over single obligor without CBN (10,379) - (10,379) -
50% investment in subsidiaries - - (2,789) (64,803)
Adjusted Total qualifying Tier 1 capital 77,969 104,399 64,198 62,695
Tier 2 capital
Other qualifying capital 26,353 23,874 26,353 23,874
AFS Fair value reserves 3,572 1,789 2,627 2,493
50% investment in subsidiaries - - (2,789) (64,803)
Adjusted Total qualifying Tier 2 capital 29,925 25,663 26,191 (38,436)
Total regulatory capital 107,894 130,062 90,389 24,259
Total risk-weighted assets 910,385 751,311 911,405 737,084
Capital Ratios
12% 17% 10% 3%
9% 14% 7% 9%
Total regulatory capital expressed as a
percentage of total risk-weighted assets
The table below summarises the composition of regulatory capital and the ratios of the bank for the years presented below.
Group Bank
Total tier 1 capital expressed as a percentage of
risk-weighted assets
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
70
NOTES TO THE FINANCIAL STATEMENTS
5
Acco
un
tin
gcla
ssifi
cati
on
,m
easu
rem
en
tb
asis
an
dfa
irvalu
es
Th
eta
ble
sbe
low
sets
ou
tth
eG
roup's
cla
ssi
cation
of
each
class
of
nan
cial
assets
and
liabili
ties
and
their
fair
valu
es.
All
fair
valu
em
easu
rem
en
tsare
recurr
ing.
Gro
up
31
Decem
ber
20
15
Held
for
trad
ing
Fair
valu
e
thro
ug
h
pro
fit
or
loss
Held
to
matu
rity
Lo
an
san
d
receiv
ab
les
Avail
ab
le
for
sale
Oth
er
fin
an
cia
l
liab
ilit
ies
at
co
st
To
tal
carr
yin
g
am
ou
nt
Level
1Level
2Level
3Fair
valu
e
Fin
an
cia
lassets
Cash
and
short
term
funds
--
-205,1
47
--205,1
47
-205,1
47
-205,1
47
Due
from
banks
and
oth
er
financia
lin
stitu
tions
--
-37,0
31
--
37,0
31
-37,0
31
-37,0
31
Fin
ancia
lassets
held
for
tradin
g344
--
--
-344
120
224
-344
Derivative
financia
lassets
-178
--
--
178
-178
-178
Loans
and
advances
tocusto
mers
--
-704,8
96
--
704,8
96
--
704,8
96
704,8
96
Available
for
sale
investm
ents
-Q
uote
dequity
investm
ent
measure
dat
fair
valu
e-
--
-9,5
40
-9,5
40
10
9,5
30
-9,5
40
-Tre
asury
bills
--
--
21
-21
21
--
21
-Bonds
--
--
5,3
14
-5,3
14
5,3
14
--
5,3
14
Held
tom
atu
rity
investm
ents
-Tre
asury
bills
--
11,3
51
--
-11,3
51
11,3
80
--
11,3
80
-Federa
lgovern
ment
bonds
--
39,4
05
--
-39,4
05
43,7
18
--
43,7
18
Loans
and
receiv
able
s investm
ents
-Corp
ora
tebonds
--
-3,0
87
--
3,0
87
-4,1
94
-4,1
94
-Sta
tegovern
ment
bonds
--
-27,7
42
--
27,7
42
-29,4
90
-29,4
90
-Euro
bonds
--
-4,1
20
--
4,1
20
-3,2
14
-3,2
14
Assets
ple
dged
as
collate
ral
-Tre
asury
bills
--
21,2
86
--
-21,2
86
21,4
52
--
21,4
52
-Federa
lgovern
ment
bonds
--
33,8
78
--
-33,8
78
34,2
03
--
34,2
03
-Sta
tegovern
ment
bonds
--
-12,7
31
--
12,7
31
-13,8
11
-13,8
11
-Corp
ora
tebonds
--
-806
--
806
-806
-806
Oth
er
assets
--
-1,3
60
--
1,3
60
-1,3
60
-1,3
60
344
178
105,9
20
996,9
20
14,8
75
-1,1
18,2
37
116,2
18
304,9
85
704,8
96
1,1
26,0
99
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
--
--
-33,1
10
33,1
10
-33,1
10
-33,1
10
Deposits
and
oth
er
accounts
--
--
-753,1
45
753,1
45
-753,1
45
-753,1
45
Derivative
financia
lliabilitie
s-
335
--
--
335
--
335
335
Borr
ow
ings
from
localand
fore
ign
banks/I
nstitu
tions
--
--
-216,4
48
216,4
48
-216,4
48
-216,4
48
Oth
er
liabilitie
s-
--
--
78,5
88
78,5
88
-78,5
88
-78,5
88
-335
--
-1,0
81,2
91
1,0
81,6
26
-1,0
81,2
91
335
1,0
81,6
26
Carr
yin
gam
ou
nt
Fair
valu
e am
ort
ised
Fa
ir v
alu
es
of
n
an
cia
l a
ss
ets
an
d l
iab
ilit
ies
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
71
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
72
Gro
up
31
Decem
ber
20
14
Held
for
trad
ing
Fair
valu
e
thro
ug
h
pro
fit
or
loss
Held
to
matu
rity
Lo
an
san
d
receiv
ab
les
Avail
ab
le
for
sale
Oth
er
fin
an
cia
l
liab
ilit
ies
at
am
ort
ised
co
st
To
tal
carr
yin
g
am
ou
nt
Level
1Level
2Level
3Fair
valu
e
Fin
an
cia
lassets
Cash
and
short
term
funds
--
-300,6
44
--
300,6
44
-300,6
44
-300,6
44
Due
from
banks
and
oth
er
financia
lin
stitu
tions
--
-72,9
78
--
72,9
78
-72,9
78
-72,9
78
Fin
ancia
lassets
held
for
tradin
g18,2
83
--
--
-18,2
83
17,1
55
1,1
28
-18,2
83
Loans
and
advances
tocusto
mers
--
-645,7
74
--
645,7
74
672,9
41
672,9
41
Available
for
sale
investm
ents
-Q
uote
dequity
investm
ent
measure
dat
fair
valu
e-
--
8,3
36
-8,3
36
10
8,3
27
-8,3
37
-Tre
asury
bills
--
--
3-
33
--
3-
Bonds
--
--
75
-75
75
--
75
Held
tom
atu
rity
investm
ents
-Tre
asury
bills
--
87,7
72
--
-87,7
72
38,3
41
--
38,3
41
-Federa
lgovern
ment
bonds
--
37,3
29
--
-37,3
29
25,6
99
--
25,6
99
Loans
and
receiv
able
s investm
ents
--
Corp
ora
tebonds
--
-7,5
57
--
7,5
57
-7,6
67
-7,6
67
-Sta
teG
overn
ment
bonds
--
-25,0
98
25,0
98
-16,4
77
-16,4
77
-Euro
bonds
--
-3,4
03
--
3,4
03
-3,4
03
-3,4
03
Assets
ple
dged
as
collate
ral
--
Tre
asury
bills
--
44,8
30
--
-44,8
30
44,7
98
--
44,7
98
-Federa
lgovern
ment
bonds
--
34,3
19
--
-34,3
19
31,7
26
--
31,7
26
-Sta
tegovern
ment
bonds
--
11,0
21
--
-11,0
21
-10,3
73
-10,3
73
Oth
er
assets
--
-6,4
73
--
6,4
73
-6,4
73
-6,4
73
18,2
83
-215,2
71
1,0
61,9
27
8,4
14
-1,3
03,8
95
157,8
07
427,4
70
672,9
41
1,2
58,2
18
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
--
--
-51,8
16
51,8
16
-51,8
16
-51,8
16
Deposits
and
oth
er
accounts
--
--
-952,3
02
952,3
02
-952,3
02
-952,3
02
Derivative
financia
lliabilitie
s-
288
--
--
288
-288
-288
Borr
ow
ings
from
localand
fore
ign
banks/I
nstitu
tions
--
--
-131,2
79
131,2
79
-131,2
79
-131,2
79
Oth
er
liabilitie
s-
--
--
97,9
66
97,9
66
-97,9
66
-97,9
66
Lia
bilitie
son
investm
ent
contr
acts
--
--
-26
26
-26
-26
-288
--
-1,2
33,3
89
1,2
33,6
77
-1,2
33,6
77
-1,2
33,6
77
Carr
yin
gam
ou
nt
Fair
valu
e
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Ban
k
31
Decem
ber
20
15
Held
for
trad
ing
Fair
valu
e
thro
ug
h
pro
fit
or
loss
Held
to
matu
rity
Lo
an
san
d
receiv
ab
les
Avail
ab
le
for
sale
Oth
er
fin
an
cia
l
liab
ilit
ies
at
am
ort
ised
co
st
To
tal
carr
yin
g
am
ou
nt
Level
1Level
2Level
3Fair
valu
e
Fin
an
cia
lassets
Cash
and
short
term
funds
--
-202,7
25
--
202,7
25
-202,7
25
-202,7
25
Due
from
banks
and
oth
er
financia
lin
stitu
tions
--
-35,6
17
--
35,6
17
-35,6
17
-35,6
17
Fin
ancia
lassets
held
for
tradin
g131
--
--
-131
120
11
-131
Loans
and
advances
tocusto
mers
--
-700,4
03
--
700,4
03
--
700,4
03
700,4
03
Available
for
sale
investm
ents
-Q
uote
dequity
investm
ent
--
--
7,1
84
-7,1
84
10
7,1
74
7,1
84
-Tre
asury
bills
--
--
19
-19
19
--
19
-Federa
lgovern
ment
bonds
--
--
2,6
09
-2,6
09
2,6
09
--
2,6
09
Held
tom
atu
rity
investm
ents
--
--
--
Tre
asury
bills
--
3,6
26
--
-3,6
26
3,6
55
--
3,6
55
-Federa
lgovern
ment
bonds
--
39,4
05
--
-39,4
05
43,7
18
--
43,7
18
Loans
and
receiv
able
sin
vestm
ents
-Corp
ora
tebonds
--
-2,9
75
--
2,9
75
-3,2
05
-3,2
05
-Sta
tegovern
ment
bonds
--
-26,8
24
--
26,8
24
-28,5
73
-28,5
73
-Euro
bonds
--
-4,1
20
--
4,1
20
-3,2
14
-3,2
14
Assets
ple
dged
as
collate
ral
--
Tre
asury
bills
--
21,2
86
--
-21,2
86
21,4
52
--
21,4
52
-Federa
lgovern
ment
bonds
--
33,8
78
--
-33,8
78
34,2
03
--
34,2
03
-Sta
tegovern
ment
bonds
--
-12,7
31
--
12,7
31
-13,8
11
-13,8
11
-Corp
ora
tebonds
--
-806
--
806
-866
-866
Oth
er
assets
--
-7,0
95
-7,0
95
-7,0
95
-7,0
95
131
-98,1
95
993,2
96
9,8
12
-1,1
01,4
34
105,7
86
302,2
91
700,4
03
1,1
08,4
80
Fin
an
cia
lliab
ilit
ies
-D
ue
tooth
er
financia
lin
stitu
tions
--
--
-31,7
66
31,7
66
-31,7
66
-31,7
66
Deposits
and
oth
er
accounts
--
--
-754,8
82
754,8
82
-754,8
82
-754,8
82
Derivative
financia
lliabilitie
s-
335
--
--
335
--
335
335
Borr
ow
ings
from
localand
fore
ign
banks/I
nstitu
tions
--
--
-216,4
48
216,4
48
-216,4
48
-216,4
48
Oth
er
liabilitie
s-
--
--
74,1
41
74,1
41
-74,1
41
-74,1
41
-335
--
-1,0
77,2
37
1,0
77,5
72
-1,0
77,2
37
335
1,0
77,5
72
Carr
yin
gam
ou
nt
Fair
valu
e
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
73
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Ban
k
31
Decem
ber
20
14
Held
for
trad
ing
Fair
valu
e
thro
ug
h
pro
fit
or
loss
Held
to
matu
rity
Lo
an
san
d
receiv
ab
les
Avail
ab
le
for
sale
Oth
er
fin
an
cia
l
liab
ilit
ies
at
am
ort
ised
co
st
To
tal
carr
yin
g
am
ou
nt
Level
1Level
2Level
3Fair
valu
e
Fin
an
cia
lassets
Cash
and
short
term
funds
--
-251,8
05
--
251,8
05
-251,8
05
-251,8
05
Due
from
banks
and
oth
er
financia
lin
stitu
tions
--
-56,1
14
--
56,1
14
-56,1
14
-56,1
14
Fin
ancia
lassets
held
for
tradin
g1,3
84
--
--
-1,3
84
256
1,1
28
-1,3
84
Loans
and
advances
tocusto
mers
--
-598,1
97
--
598,1
97
619,8
77
619,8
77
Investm
ent
securities:
Available
for
sale
investm
ents
-Q
uote
dequity
investm
ent
--
--
2,7
18
-2,7
18
10
2,7
08
-2,7
18
Held
tom
atu
rity
investm
ents
-Tre
asury
bills
--
38,5
71
--
-38,5
71
38,3
16
--
38,3
16
-Federa
lgovern
ment
bonds
--
34,1
16
--
-34,1
16
25,6
99
--
25,6
99
Loans
and
receiv
able
sin
vestm
ents
--
Corp
ora
tebonds
140
140
-110
-110
-Sta
tegovern
ment
bonds
18,2
47
18,2
47
-16,4
77
-16,4
77
Assets
ple
dged
as
collate
ral
-Tre
asury
bills
--
7,6
54
--
-7,6
54
7,6
22
--
7,6
22
-Federa
lgovern
ment
bonds
--
15,3
91
--
-15,3
91
12,7
98
--
12,7
98
-Sta
tegovern
ment
bonds
--
-11,0
21
--
11,0
21
-10,3
73
-10,3
73
Oth
er
assets
--
-6,5
94
--
6,5
94
-6,5
94
6,5
94
1,3
84
-95,7
32
942,1
18
2,7
18
-1,0
41,9
52
84,7
01
345,3
09
619,8
77
1,0
49,8
87
Fin
an
cia
lli
ab
ilit
ies
Due
tooth
er
financia
lin
stitu
tions
--
--
-12,4
98
12,4
98
-12,4
98
-12,4
98
Deposits
and
oth
er
accounts
--
--
-818,4
57
818,4
57
-818,4
57
-818,4
57
Derivative
financia
lliabilitie
s-
288
--
--
288
--
288
288
Borr
ow
ings
from
localand
fore
ign
banks/I
nstitu
tions
--
--
-124,9
67
124,9
67
-124,9
67
-124,9
67
Oth
er
liabilitie
s-
--
--
112,2
09
112,2
09
-112,2
09
-112,2
09
-288
--
-1,0
68,1
31
1,0
68,4
19
-1,0
68,1
31
288
1,0
68,4
19
Carr
yin
gam
ou
nt
Fair
valu
e
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
74
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
75
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
For year ended 31 December 2015
5
i Cash and short term funds and due from banks and other financial institutions
ii Investment securities (held to maturity) and assets pledged as collateral
iii Loans and advances to customers
iv Other assets
v Deposit from customers
vi Borrowings from local and foreign banks/institutions
vii Other liabilities
The estimated fair value of xed interest-bearing borrowings not quoted in an active market is based on discounted cashflows using the contractual interest rates for these debts over their remaining maturity.
The fair value for financial assets and liabilities that are not carried at fair value were determined respectively as follows:
The Group adopts a single approach in fair valuing its risk assets. This entails valuing all facilities with variable and fixed
interest rates using the discounted cash flow approach (Level 3). The Group’s variable rate facilities are indexed to the
Central Bank of Nigeria Monetary Policy Rate or Nigeria Interbank O ering Rate, with a spread to cover for the inherent
risk of individual facilities.
The bulk of these financial assets have short (less than 3months) maturities with the carrying amounts of the financial
assets being a reasonable approximation of fair value.
Fair values of customers’ deposits have been determined using discounted cash flow techniques applying the rates on
deposits of similar maturities and terms to discount the contractual cash flows.
Financial instruments at fair value (including those held for trading, fair value through profit or loss, derivatives and
available-for-sale) are either priced with reference to a quoted market price for that instrument or by using a valuation
model. Where the fair value is calculated using a valuation model, the methodology is to calculate the expected cash flows
under the terms of each specific contract and then discount these values back to a present value. The expected cash flows
for each contract are determined either directly by reference to actual cash flows implicit in observable market prices or
through modelling cash flows using appropriate financial markets pricing models. Wherever possible these models use as
their basis observable market prices and rates including, for example, interest rate yield curves, equities and prices.
The carrying amount of cash, short term funds and due from banks and other financial institutions are reasonable
approximation of their fair value.
The fair value for investment securities is based on market prices from financial market dealer price quotations.Where this
information is not available, fair value is estimated using quoted market prices for securities with similar credit, maturity
and yield characteristics.
Fair values of nancial assets and liabilities continued
Fair values of nancial assets and liabilities carried at fair value
Fair values of nancial assets and liabilities not carried at fair value
The carrying amount of nancial liabilities in other liabilities is a reasonable approximation of their fair values.
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
76
6
a
b
The present value of the retirement benet obligations depends on a number of factors that are determined on an actuarialbasis using a number of assumptions. Any changes in these assumptions will impact the carrying amount of pensionobligations. The assumptions used in determining the net cost (income) for pensions include the discount rate. The Groupdetermines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determinethe present value of estimated future cash outows expected to be required to settle the pension obligations.
In determining the appropriate discount rate, the Group considers the interest rates of Federal Government of Nigeria bondsthat are denominated in the currency in which the benets will be paid and that have terms to maturity approximating theterms of the related pension liability. Other key assumptions for pension obligations are based in part on current marketconditions. Please refer to note 42.1d for principal assumptions and sensitivity of the dened benet obligation to changes inthe weighted principal assumptions.
Signicant accounting judgments, estimates and assumptions
Allowances for credit losses
Assets accounted for at amortised cost are evaluated for impairment on a basis described in accounting policy 2.9. Thespecic counterparty component of the total allowances for impairment applies to claims evaluated individually forimpairment and is based upon management’s best estimate of the present value of the cash ows that are expected to bereceived. In estimating these cash ows, management makes judgements about a counterparty’s nancial situation and thenet realisable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy andestimate of cash ows considered recoverable are independently approved by the Credit Risk function.
Collectively assessed impairment allowances cover credit losses inherent in portfolios of loans and advances and held tomaturity investment securities with similar economic characteristics when there is objective evidence to suggest that theycontain impaired loans and advances and held to maturity investment securities, but the individual impaired items cannot yetbe identied. A component of collectively assessed allowances is for country risks.
Dened benets plan
In assessing the need for collective loan loss allowances, management considers factors such as credit quality, portfolio size,concentrations, and economic factors. In order to estimate the required allowance, assumptions are made to dene the wayinherent losses are modelled and to determine the required input parameters, based on historical experience and currenteconomic conditions. The accuracy of the allowances depends on how well future cash ows for specic counterpartyallowances and the model assumptions and parameters used in determining collective allowances are estimated. Please referto note 3 for sensitivity analysis of the exposure at default to changes to the emergence period (EP), loss given default (LGD)and probability of default (PD).
The Group’s nancial statements and its nancial result are inuenced by accounting policies, assumptions, estimates andmanagement judgement, which necessarily have to be made in the course of preparation of the consolidated nancialstatements. The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within thenext nancial year. All estimates and assumptions required in conformity with IFRS are best estimates undertaken inaccordance with the applicable standard. Estimates and judgements are evaluated on a continuous basis, and are based onpast experience and other factors, including expectations with regard to future events. Accounting policies andmanagement’s judgements for certain items are especially critical for the Group’s results and nancial situation due to theirmateriality.
The signicant judgements made by management in applying the Group's accounting policies and the key sources ofestimation uncertainty in these nancial statements, which together are deemed critical to the Group's results and nancialposition, are as follows:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
c
i
ii
Valuation of nancial instruments
Financial instruments in Level 1
The fair value of nancial instruments traded in active markets is based on quoted market prices at the balance sheet date. Amarket is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industrygroup, pricing service, or regulatory agency, and those prices represent actual and regularly occuring market transactions onan arm's length basis. The quoted market price used for nancial assets held by the Group is the current mid price.Instruments included in Level 1 comprise primarily equity and debt securities classied as held for trading securities oravailable for sale.
The fair value of nancial instruments that are not traded in an active market is determined by using valuation techniques.These valuation techniques maximise the use of observable market data where it is available and rely as little as possible onentity specic estimates. If all signicant inputs required to fair value an instrument are observable, the instrument isincluded in level 2.
The Group uses widely recognised valuation models for determining the fair value of its financial assets. The fair values ofunquoted equity investments have been generally derived using the adjusted fair value comparison approach. Quoted priceper earning or price per book value, enterprise value to EBITDA ratios of comparable entities in a similar industry wereobtained and adjusted for key factors to reect estimated ratios of the investment being valued.
Financial instruments in Level 2
Adjusting factors used are the Illiquidity Discount which assumes a reduced earning on a private entity in comparison to apublicly quoted entity. The unobservable inputs used entails average P/B and P/E multiples of comparable companies andmedian of Enterprise value to EBITDA ratio (EV/EBITDA) of similar comparable companies.
The Group’s accounting policy on fair value measurements is discussed under note 2.6. The Group measures fair values usingthe following hierarchy of methods.
If one or more of the signicant inputs is not based on observable market data, the instrument is included in Level 3. Specicvaluation techniques used to value nancial instruments include:
- Quoted market prices or dealer quotes for similar instruments;- The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based onobservable swap curves which is the main input into the valuation;- Other techniques, such as discounted cash ow analysis, are used to determine fair value for the remaining nancialinstruments.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
77
NOTES TO THE FINANCIAL STATEMENTS
Description
Valuation
technique
Unobservable
inputs
Range of
unobservable
inputs
Relationship of
unobservable
inputs to fair
value
Group Bank
Nigeria Interbank
Settlement Systems
2,828 2,828 Adjusted fair
value
comparison
approach
Median Price to
earnings (P/E)
ratio of similar
comparable
companies
P/E 7.4 to 47.8
Illiquidity ratio
15.0%
The higher the
P/E ratio of
similar trading
companies, the
higher the fair
value
Unified Payment Services
Limited
1,612 1,612 Adjusted fair
value
comparison
approach
Median of
Enterprise
value to EBITDA
ratio
(EV/EBITDA) of
similar
comparable
companies
EV/EBITDA
3.4 to 7.9
Illiquidity ratio
15%
The higher the
EV/EBITDA ratio
of similar trading
companies, the
higher the fair
value
AFREXIM Bank
796 796 Adjusted fair
value
comparison
approach
Median Price to
Net book value
(P/BV) ratio of
similar
comparable
companies
P/BV 0.9 to 1.2
Illiquidity ratio
15%
The higher the
P/BV ratio of
similar trading
companies, the
higher the fair
value
FMDQ OTC Securities
Exchange
233 233 Adjusted fair
value
comparison
approach
Median Price to
earnings (P/E)
ratio of similar
comparable
companies
P/E 12.7 to
26.9
Illiquidity ratio
15%
The higher the
P/E ratio of
similar trading
companies, the
higher the fair
value
FSDH Merchant Bank
497 497 Adjusted fair
value
comparison
approach
Median Price to
Net book value
(P/BV) ratio of
similar
comparable
companies
P/BV 0.2 to 1.7
Illiquidity ratio
15%
The higher the
P/BV ratio of
similar trading
companies, the
higher the fair
value
Trustfund Pensions Plc
1,207 1,207 Adjusted fair
value
comparison
approach
Median Price to
Net book value
(P/BV) ratio of
similar
comparable
companies
P/BV 1.83 to
5.89
Illiquidity ratio
15%
The higher the
P/BV ratio of
similar trading
companies, the
higher the fair
value7,173 7,173
Fair value at 31 December
2015
Information about fair value measurements using significant unobservable inputs (Level 2)
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
78
NOTES TO THE FINANCIAL STATEMENTS
iii
31
December
31
December2015 2014
At 1 January 1,017 -
- 1,017
Transfers out of level 3 (759) -
Net fair value changes (258) -
At 31 December - 1,017
Information about fair value measurements using significant unobservable inputs (Level 3)
Description
Fair value at
31 December
2014
Valuation
technique
Unobservable
inputs
Range of
unobseravble
inputs
Relationship of
unobservable
inputs to fair
value
FSDH Merchant Bank 1,017
Discounted
cash flows
- Risk adjusted
discount rate
- Cash flow
estimates
Discount rate
10% to 12%
The higher the
spread above the
risk-free rate
would result in a
lower fair value
The following table presents the changes in level 3 instruments for the year ended 31 December 2015 and 31 December
2014.
Acquired through business combination
Group
The transfers out of level 3 were due to the availability of observable inputs that were included in the valuation of the FSDH
investment. The entity's policy on timing is to deem that the transfers happened at the end of the reporting period.
Reconciliation of level 3 items
Financial instruments in Level 3
The Group uses widely recognised valuation models for determining the fair value of its financial assets. Valuation techniques
include net present value and discounted cashflow models. Assumptions and inputs used in valuation technique include risk
free and discount rate. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price
that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants
at the measurement date.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
79
NOTES TO THE FINANCIAL STATEMENTS
7 Interest income
Cash and short term funds
Loans and advances to customers:
- Term loans
- Overdraft
- Finance lease receivables
Financial assets held for trading
Investment securities:
- Available for sale
- Held to maturity
- Loans and receivables
8 Interest expense
Savings deposits
Time deposits
Interbank takings
Borrowed funds
Current deposits
9 Loan impairment charges
Specific impairment
Collective impairment
10 Fee and commission income
Commission on turnover
Commission on telex transfer
Commission on off-balance sheettransactionsRemittance fees
Letters of credit commission and fees
Commission on cheque book issued
Card related commission
Collection revenue
Other fee and commission income
Interest income for the Group for the year ended 31 December 2015 includes N1.2 Billion (2014:N1.3 billion) accrued
on impaired financial assets.
31 December 31 December 31 December 31 December
2015 2014 2015 2014
1,965 3,790 2,392 3,546
71,111 60,961 69,905 60,621
21,925 15,689 21,925 15,689
2,517 2,691 2,517 2,691
1,834 4,735 1,834 4,673
2,426 - 2,037 -
18,341 12,176 17,269 12,056
7,789 7,805 7,680 7,805
127,908 107,847 125,559 107,081
Group Bank
31 December 31 December 31 December 31 December
2015 2014 2015 2014
3,041 2,027 3,018 2,013
53,723 30,594 54,461 30,531
9,471 3,268 9,391 3,268
7,088 5,985 7,088 5,985
3,670 2,698 4,127 2,698
76,993 44,572 78,085 44,495
31 December 31 December 31 December 31 December
2015 2014 2015 2014
16,686 13,475 17,917 14,293
10,850 5,517 10,789 5,413
27,536 18,992 28,706 19,706
31 December 31 December 31 December 31 December
2015 2014 2015 2014
1,830 3,044 1,759 2,993
2,319 1,739 1,974 1,739
730 469 730 452
4,645 2,192 4,630 2,192
1,448 172 1,364 104
385 109 381 106
2,423 2,323 2,419 2,323
1,904 3,378 1,904 3,378
1,178 1,488 970 1,245
16,862 14,914 16,131 14,532
Group Bank
Group Bank
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
80
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
81
11 Fee and commission expense
NEFT/NIBSS transfer charges
Bank charges
Other fee and commission expense
12 Net trading income
Foreign exchange translation gains
(unrealised)Foreign exchange trading income
Net fair value changes in held for trading
securities
13 Other operating income
Revenue collection income
Other investment income
Rental income
Recoveries on loans previously written off(Loss)/gain on disposal of property and
equipmentGain on disposal of equity investments
Sundry income
14 Impairment charge on other financial
assets
Impairment charge on other assets and
equity securities
15 Employee benefit & compensation cost
Wages & salaries
Defined contribution
Defined benefit
Other staff cost (note 15.1)Termination expenses
Dividend income on available for sale equity
investment
Net fair value loss arising from derivative
instrument
31 December 31 December 31 December 31 December
2015 2014 2015 2014
452 299 452 299
1,181 1,237 1,165 1,237
168 348 168 319
1,801 1,884 1,785 1,855
31 December 31 December 31 December 31 December
2015 2014 2015 2014
(47) (39) (47) (39)
10,633 1,253 9,922 1,251
2,168 7,030 2,168 7,006
703 1,008 712 1,008
13,457 9,252 12,755 9,226
31 December 31 December 31 December 31 December
2015 2014 2015 2014
317 18 264 18
- 490 - 490
98 77 - -
114 20 81 20
2,561 1,340 2,530 1,337
(77) 201 (92) 201
555 631 555 631
2,083 1,952 1,728 1,910
5,651 4,729 5,066 4,607
31 December 31 December 31 December 31 December
2015 2014 2015 2014
7,145 1,959 6,251 1,959
7,145 1,959 6,251 1,959
31 December 31 December 31 December 31 December
2015 2014 2015 2014
33,125 16,383 32,052 16,194
482 688 448 682
2,061 2,259 2,061 2,259
870 346 870 346
1,691 - 1,691 -
38,229 19,676 37,122 19,481
Bank
Group Bank
Group Bank
Group
Group
Group
Bank
Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
15.1 Other staff cost
15.2 Employees and directors
a Employees
The average number of persons employed by the Group during the year was as follows:
Executive directors
Management
Non-management
N300,001 - N2,000,000
N2,000,001 - N2,800,000
N2,800,001 - N3,500,000
N3,500,001 - N4,000,000
N4,000,001 - N5,500,000
N5,500,001 - N6,500,000
N6,500,000 - N7,800,000
N7,800,001 - N9,000,000
N9,000,001 and above
b Directors' emoluments
Fees and sitting allowances
Other director expenses and benefits
Total directors' related expenses (note 16)
Executive compensation
Chairman
Highest paid director
The number of employees of the Group, other than directors, who received emoluments in the following ranges
(excluding pension contributions and certain benefits) were:
Remuneration paid to the Directors was:
Fees and other emoluments disclosed above include amounts paid to:
Other staff cost represent benets accruing to employees with respect to loans granted at below market interest rate
31 December 31 December 31 December 31 December
2015 2014 2015 2014
8 4 8 4
49 202 37 164
4,351 4,600 3,986 2,805
4,408 4,806 4,031 2,973
BankGroup
31 December 31 December 31 December 31 December
2015 2014 2015 2014Number Number Number Number
554 358 264 262
40 54 - -
17 27 - -
722 773 720 521
1,251 1,177 1,245 569
4 361 - -
690 697 688 618
607 433 605 396
515 922 501 603
4,400 4,802 4,023 2,969
Group Bank
31 December 31 December 31 December 31 December
2015 2014 2015 2014
40 36 33 30
209 204 188 198
249 240 221 228
390 294 390 294
639 534 611 522
BankGroup
5 5 5 5
84 84 84 84
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
82
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
83
31 December 31 December 31 December 31 December
2015 2014 2015 2014Number Number Number Number
Below N1,000,000 - 1 - 1N1,000,000 -N2,000,000 - - - -N2,000,001 -N3,000,000 - 1 - 1N3,000,001 -N4,000,000 8 8 8 8N4,000,001 -N5,000,000 1 1 1 1N5,000,001 and above 8 5 8 5
17 16 17 16
The number of directors who received fees and other emoluments (excluding pension contributions and certain
benefit) in the following ranges was:
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
Gender analysis
Analysis of total employees - Bank 2015
Male Female Male Female
Full staff 2,434 1,597 60% 40%
Support 3,196 2,722 54% 46%
Employees 5,630 4,319 57% 43%
Analysis of board and top management staff
Board Member (Executive
and Non-Executive
Directors)
12 5 71% 29%
Top Management Staff (AGM-GM) 31 6 84% 16%
43 11 80% 20%
Further analysis of board and top management staffby gender
Assistant General Managers 19 3 86% 14%
Deputy General Manager 6 3 67% 33%
General Managers 6 - 100% 0%
Executive Directors 3 3 50% 50%
Deputy Managing Director - 1 0% 100%
Managing Director/CEO 1 - 100% 0%
Non-Executive Directors 8 1 89% 11%
43 11 80% 20%
Percentage
c
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
84
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
16 Administration and general expenses
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Advertising and business promotion 1,306 3,394 1,282 3,383
Communication and operational cost 2,701 1,676 1,546 1,647
Insurance costs 990 872 1,012 853
Legal and professional fees 1,726 1,202 1,621 1,196
NDIC insurance premium 3,707 3,316 3,705 3,316
Repairs and maintenance 2,952 3,442 2,880 3,408
Transport, travel, accommodation 493 2,278 465 2,254
Stationery and printing 2,350 2,102 2,336 2,092
Security expenses 1,651 1,178 1,619 1,175
Training expenses 413 476 412 470
Contract services 3,161 2,340 3,161 2,306
Charities and donations 64 457 62 457
Directors' related expenses 249 240 221 228
AMCON sinking fund expenses 7,038 5,570 7,038 5,570
Utilities 727 342 640 302
Ofce expenses 1,030 1,115 1,006 1,107
Newspapers and periodicals 12 12 12 10
Rents and rates 1,918 975 1,778 910
Auditors remuneration 258 157 210 150
Penalties for non-compliance with banking
regulations (note 16.1)
4,065 330 4,063 330
Impairment of intangible assets 212 - 212 -
Other administrative expenses 3,851 3,321 3,403 3,397
40,874 34,795 38,684 34,561
BankGroup
16.1 Contravention of Banks and other financial Institutions Act, CAP B3 LFN 2004 (BOFIA)
Bank 2015
Banking legislation Penalties
Late remittance of FGN MDAS deposit toTSA
4,005
Inadequate Disclosure of Public Sector
Accounts
22
CBN guidelines 16
CBN guidelines 14
Failure to meet the TSA deadline 4
CBN guidelines 2
4,063
17 Depreciation and amortisation
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Depreciation of property, plant and
equipment (note 31)
7,101 3,847 6,930 3,718
Amortisation of intangible assets (note 32) 1,845 543 1,815 406
8,946 4,390 8,745 4,124
Group Bank
Section 64(1) of BOFIA CAP B3, LFN 2004
Infractions noted based on risk assessment of the
bank
Penalty for various infractions on Anti-money
laundering and combating the financing of terrorism
(AML/CFT)
CBN Circular: BSD/DIR/GEN/LAB/08/048 OF
September 7, 2015
CBN Circular: BSD/DIR/GEN/LAB/08/048 OF
September 7, 2015
Penalty of facilities granted to Public Sector(StateGovernment)
Nature of contravention
The bank contravened certain sections of the Banks and Other Financial Institutions Act (BOFIA) CAP B3, LFN 2004,
and other regulatory guidelines during the year as stated below:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
85
NOTES TO THE FINANCIAL STATEMENTS
18 Earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares.
Basic earnings per share (EPS) is calculated by dividing the net profit/(loss) attributable to shareholders by the
weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary
shares purchased by the members of the group and held as treasury shares. Where a stock split has occurred, the
number of shares in issue in the prior year is adjusted to achieve comparability.
31 December 31 December 31 December 31 December
2015 2014 2015 2014
(Loss)/profit attributable to equity holders (40,804) 18,668 (42,423) 8,629
Number of ordinary shares in issue as at
year end1
13,637 13,637 13,880 13,880
Shares in issue for full year 12,976 12,976 13,219 13,219
Bonus issue 661 661 661 661
Time weighted average number of ordinary
shares
13,637 13,637 13,880 13,880
Basic and diluted (loss)/earnings per
share (kobo)
(299) 137 (306) 62
The Group does not have any dilutive potential ordinary shares. Therefore, Basic EPS and Diluted EPS are the same
for the Group.
Group
1The number of ordinary shares in the Group differs from that of the bank due to treasury shares held by share trust
scheme of 243 million (December 2014: 243 million) ordinary shares.
The bank issued 661 million bonus shares in the proportion of 1 for 20 for the year ended 31 December 2015. The
EPS for the comparative period has been restated as if the bonus issue had taken place at the start of the
comparative period.
Bank
2
2
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
86
NOTES TO THE FINANCIAL STATEMENTS
19 Cash and balances with central banks
Cash in vault
Operating account with the central banks
Included in cash and cash equivalents
Cash reserve with central banks
19.1 Cash and cash equivalents
Cash in vault (note 19)
Operating account with the central banks (note 19)
Treasury bills with original maturity of
90daysDue from banks and other financial
institutions excluding long term placements
and cash collateral
20 Due from banks and other financial institutions
Current account balances within Nigeria
Current account balances and placements
outside NigeriaPlacements with other banks
Current
21 Financial assets held for trading
Treasury Bills
Federal Government of Nigeria Bonds
Corporate bonds
Equities
Current
Trading securities are fair valued through profit or loss. They were acquired principally for the purpose of trade in thenear term and to take advantage of favourable uctuations in the market price of the asset. Gains or losses relatingto trading securities that are measured at fair value are included in note 12.
Cash and cash equivalents does not include restricted cash with the Central Bank of Nigeria (CBN) which is notavailable for use by the group for normal day to day cash operations. Cash and cash equivalents also include termplacement or investments with original maturity dates of 90 days or less.
31 December 31 December 31 December 31 December
2015 2014 2015 2014
44,158 52,609 42,401 44,765
7,574 10,143 6,909 7,717
51,732 62,752 49,310 52,482
153,415 237,892 153,415 199,323
205,147 300,644 202,725 251,805
31 December 31 December 31 December 31 December
2015 2014 2015 2014
44,158 52,609 42,401 44,765
7,574 10,143 6,909 7,717
- 178 - 178
34,738 72,510 33,324 55,646
86,470 135,440 82,634 108,306
Group Bank
Group Bank
31 December 31 December 31 December 31 December
2015 2014 2015 2014
2,834 1,602 2,699 1,602
22,440 56,210 21,415 48,010
11,757 15,166 11,503 6,502
37,031 72,978 35,617 56,114
37,031 72,978 35,617 56,114
37,031 72,978 35,617 56,114
31 December 31 December 31 December 31 December
2015 2014 2015 2014
131 6,614 131 1,384
- 5,068 - -
- 4,373 -
213 2,228 - -
344 18,283 131 1,384
344 18,283 131 1,384
344 18,283 131 1,384
BankGroup
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
87
NOTES TO THE FINANCIAL STATEMENTS
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
88
NOTES TO THE FINANCIAL STATEMENTS
22 Loans and advances to customers
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Loans and advances to customers
Term loans 565,204 524,687 564,460 491,064
Overdrafts 134,192 116,355 131,424 103,112
Finance lease receivables 41,772 29,244 41,772 29,229
741,168 670,286 737,656 623,405
Impairment allowance (36,272) (24,512) (37,253) (25,208)
704,896 645,774 700,403 598,197
Current 140,131 250,083 139,436 220,480
Non-current 564,765 395,691 560,967 377,717
704,896 645,774 700,403 598,197
22.1 Movement in impairment allowance31 December 31 December 31 December 31 December
2015 2014 2015 2014
Specific impairment
Balance at 1 January 16,766 11,375 17,611 11,349
Charge for the year 16,686 13,475 17,917 14,293
Write-offs for the year
Balance at 31 December 24,487 16,766 25,678 17,611
Collective impairment
Balance at 1 January 7,746 11,611 7,597 11,611
Charge for the year 10,850 5,517 10,789 5,413
Write-offs for the year
Balance at 31 December 11,785 7,746 11,575 7,597
Total impairment 36,271 24,512 37,253 25,208
Group Bank
Group Bank
(8,965) (8,084) (9,850) (8,031)
(6,811) (9,382) (6,811) (9,427)
22.2 Finance lease receivables
Finance lease gross
Unearned income
Net investment in finance lease
Gross investment in finance lease, receivable:
Less than one year
Between one and five years
Later than five years
Unearned income
Present value of minimum lease payments
The present value of minimum lease payments is analysed as follows:
Less than one year
Between one and five years
Later than five years
Current
Non current
23 Available for sale investments
Equity investment
Treasury bills
Bonds
Current
Non-current
24 Held to maturity investments
Treasury bills
Federal Government of Nigeria bonds
Current
Non-current
31 December 31 December 31 December 31 December
2015 2014 2015 2014
41,987 29,299 41,987 29,284
(215) (55) (215) (55)
41,772 29,244 41,772 29,229
9,840 613 9,840 613
5,132 16,495 5,132 16,480
27,015 12,191 27,015 12,191
41,987 29,299 41,987 29,284
(215) (55) (215) (55)
41,772 29,244 41,772 29,229
Group Bank
9,840 612 9,840 613
4,917 16,466 4,917 16,448
27,015 12,166 27,015 12,168
41,772 29,244 41,772 29,229
9,840 612 9,840 613
31,932 28,632 31,932 28,616
41,772 29,244 41,772 29,229
31 December 31 December 31 December 31 December
2015 2014 2015 2014
9,540 8,336 7,184 2,718
21 3 19 -
5,314 75 2,609 -
14,875 8,414 9,812 2,718
2,649 1,832 2,628 -
12,226 6,582 7,184 2,718
14,875 8,414 9,812 2,718
31 December 31 December 31 December 31 December
2015 2014 2015 2014
11,351 87,772 3,626 38,571
39,405 37,329 39,405 34,116
50,756 125,101 43,031 72,687
11,551 78,578 8,953 38,758
39,205 46,523 34,078 33,929
50,756 125,101 43,031 72,687
Group Bank
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
89
NOTES TO THE FINANCIAL STATEMENTS
25 Loans and receivables investments
Corporate bonds
State government bonds
Euro bonds
Current
Non-current
26 Assets pledged as collateral
Federal Government of Nigeria Bonds
Treasury bills
State Government BondsCorporate Bonds
Current
Non current
The related liability for assets pledged as collateral include:
Borrowings (Note 37)
Bank of industryAfrexim
United Bank for Africa Plc New York
Due to other financial institutions (Note 34)
Wema Bank
First Bank
Diamond bank
Zenith Bank
In connection with the bank’s financing and trading activities, the bank has pledged assets to secure its borrowings.
The bank is not allowed to pledge these assets as security for other borrowings or to sell them to another entity. The
carrying values of the Group's pledged assets are as follows:
In addition, included in cash and due from banks at 31 December 2015 is $11.7 Million (2014: $2.8Million), of cash
to collateralize the bank's obligations under an interest rate swap, Mastercard and Visa program and other
borrowings.
Assets pledged as collateral for both periods relate to assets pledged to Federal Inland Revenue Service (FIRS),
Nigerian Interbank Settlement System (NIBSS), Interswitch Nigeria Limited, Bank of Industry, AFREXIM, and
Unified Payment Services Limited for collections and those pledged as collateral for interbank transactions with
Diamond bank , First bank, Wema bank and Zenith bank.
31 December 31 December 31 December 31 December
2015 2014 2015 2014
3,087 7,557 2,975 140
27,742 25,098 26,824 18,247
4,120 3,403 4,120 -
34,949 36,058 33,919 18,387
4,805 18,167 4,805 496
30,144 17,891 29,114 17,891
34,949 36,058 33,919 18,387
Group Bank
31 December 31 December 31 December 31 December
2015 2014 2015 2014
33,878 34,319 33,878 15,391
21,286 44,830 21,286 7,654
12,731 11,021 12,731 11,021
806 - 806 -
68,701 90,170 68,701 34,066
30,425 71,352 30,425 15,248
38,276 18,818 38,276 18,818
68,701 90,170 68,701 34,066
Group Bank
12,696 19,154 12,696 19,154
20,227 12,493 20,227 12,493
- 11,766 - 11,766
32,923 43,413 32,923 43,413
3,000 2,505 3,000 -
2,000 - 2,000 -
5,000 - 5,000 2,505
7,000 - 7,000 -
49,923 45,918 49,923 45,918
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
90
27 Prepayment and other assets
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Financial assets
Accounts receivable 3,702 7,093 3,701 6,910
Sundry receivables 8,443 3,020 6,714 2,961
Intercompany receivables - - 7,845 1,637
12,145 10,113 18,260 11,508
Impairment allowance (see note 27.1) (10,785) (3,640) (11,165) (4,914)
1,360 6,473 7,095 6,594
Non-financial assets
Prepayments 5,510 6,212 5,253 3,788
Inventories 3,103 2,384 3,095 2,237
8,613 8,596 8,348 6,025
Net prepayment and other assets 9,973 15,069 15,443 12,619
Current 8,264 8,857 13,775 8,831
Non-current 1,709 6,212 1,668 3,788
9,973 15,069 15,443 12,619
27.1 Movement in impairment allowance
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Balance at 1 January 3,640 1,698 4,914 2,955
Charge to profit or loss (note 14) 7,145 1,959 6,251 1,959
Write offs - (17) - -
10,785 3,640 11,165 4,914
28 Trading properties
31 December 31 December
2015 2014
Balance, beginning of the year 3,866 -
Acquired through business combination - 3,866
Disposals of trading properties (7) -
Balance, end of the year 3,859 3,866
Current 3,859 3,866
3,859 3,866
Group
Group Bank
Group Bank
This represents the cost of real estate properties held by the Group which are designated for resale to customers. The
movement on the trading properties account during the year was as follows:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
91
NOTES TO THE FINANCIAL STATEMENTS
29 Investment properties
31 December 31 December
2015 2014
At beginning of the year 1,995 -
Additions during the year - 1,995
Surplus on revaluation 13 -
At end of the year 2,008 1,995
Non-current 2,008 1,995
2,008 1,995
Investment properties are made up of the following:
31 December 31 December
2015 2014
94 Broad Street Property 502 502
Owerri property 2, Imo 402 400
Umuahia property, Abia 241 240
Fair Trade Complex, Abuja 200 200
Ojuelegba property, Surulere 165 165
Atari chamber property, Benin 258 248
1 and 3 Park Road property, Zaria 115 115
Oyo Alaafin property 50 50
Ibadan property, Oyo 75 75
2,008 1,995
The fair value measurement (recurring) for the investment properties of N2.008 bn (2014: N1.9995 bn) has been
recognised as level 2 in the fair value hierarchy.
The properties were valued by Osas & Oseji (Estate Surveyors and Valuers, FRC/2012/0000000000522), independent
valuers not related to the Group. Osas & Oseji are members of the Nigerian Institute of Estate Surveyors and Valuers,
and have appropriate qualifications and experience in the valuation of properties. The valuation was done on the
basis of the open market value.
Investment properties comprise commercial properties held for capital appreciation. The amount recognised as rental
income in profit or loss for the year was N46 Million.
Group
Group
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
92
NOTES TO THE FINANCIAL STATEMENTS
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
30 Investment in subsidiaries
31 December 31 December
2015 2014
Mainstreet Bank - 126,575
Skye Bank Sierra Leone 1,468 1,468
Skye Bank Guinea 1,156 1,156
Skye Bank Gambia 408 408
- -
Mainstreet Bank Estate Company Ltd 500 -
Mainstreet Insurance Brokers Company Ltd 45 -
Mainstreet International Finance 9 -
Mainstreet Micro Finance Bank Ltd 1,000 -
Mainstreet Bureau De Change 50 -
Mainstreet Securities Ltd 442 -
Mainstreet Capital Market Ltd 1,000 -
Mainstreet Bank Registrars 138 -
Bank
Skye Bank Staff Share Scheme ( SPE)
Set out below are the Group's subsidiaries. Unless otherwise stated, the subsidiaries listed below have share capital
consisting solely of ordinary shares, which are held directly by the group and the proportion of ownership interests
held equals to the voting rights held by the group. The country of incorporation is also their principal place ofbusiness.
Mainstreet Trustees and Investment Ltd 477 -
6,693 129,607
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
93
NOTES TO THE FINANCIAL STATEMENTS
30 (a) Movement in investment in subsidiaries
The movement in investment in subsidiaries during the year is as follows:
31 December 31 December
2015 2014
Balance, beginning of year 129,607 3,032
Acquisition during the year - 126,575
Business combination under common control (126,575) -
Transferred from Mainstreet bank acquisition 9,674 -
Capital restructuring (6,013) -
Balance, end of year 6,693 129,607
Bank
The capital restructuring was approved by the Central Bank of Nigeria.
The capital restructuring undertaken by some of Mainstreet Subsidiaries was approved at the Annual General
Meetings on the 14th of December, 2012 and the necessary court orders/sanctions obtained. The Corporate AffairsCommission registered these various capital reductions during the reporting period in 2015.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
94
NOTES TO THE FINANCIAL STATEMENTS
30 (b) Principal subsidiaries
The group had the following subsidiaries at 31 December 2015
Name Country of
incorporation
and place of
business
Nature of
business
Proportion of
ordinary
shares
directly held
by parent (%)
Proportion
of ordinary
shares held
by non-
controlling
interests
(%)
Skye Bank Sierra Leone Sierra Leone Banking 99 1
Skye Bank Guinea Guinea Banking 73 27
Skye Bank Gambia Gambia Banking 81 19
Skye Bank Staff Share Scheme ( SPE) Nigeria 100 -
Mainstreet Bank Estate Company Ltd* Nigeria Property
development100 -
Mainstreet Insurance Brokers Company Ltd Nigeria Insurance
brokerage
100 -
Mainstreet International Finance Ireland Financial services 100 -
Mainstreet Microfinance Bank Ltd Nigeria Micro-Banking
Services100 -
Mainstreet BDC Ltd NigeriaBureau De Change
100 -
Mainstreet Securities Ltd Nigeria Financial services 94 6
Mainstreet Capital Markets
Ltd
Nigeria Capital market
operator100 -
Mainstreet Registrar Ltd Nigeria Company registrar
services
88 12
Nigeria Investments 100 -
Skye Bank
Sierra Leone
Skye Bank
Guinea
Skye Bank
Gambia
Mainstreet
Securities Ltd
Mainstreet
Registrar Ltd
Total non-controlling interest 16 581 220 47 63
Significant restrictions
Unconsolidated interests in structured entities
Mainstreet Trustees and Asset Management
Company Ltd
* This subsidiary has a wholly owned subsidiary, AEC Security Services Limited
All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary
undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.
The table below shows the total non-controlling interest for the period:
The Group does not have an interest in any structured entity that it does not consolidate.
There are no significant restrictions (contractual or otherwise) on the Group’s ability to access or use the assets and settle
the liabilities of any member of the Group to the extent that regulation does not inhibit/prohibit the group from having
access, and in liquidation scenario, this restriction is limited to its level of investment in the entity.
The non-controlling interest in respect of Skye Bank Sierra Leone is not material.
31 December
2015
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
95
NOTES TO THE FINANCIAL STATEMENTS
31
Pro
pert
y,
pla
nt
an
deq
uip
men
t
Gro
up
Leaseh
old
lan
d&
bu
ild
ing
s
Leaseh
old
imp
rovem
en
ts
Pla
nt
&
mach
inery
Fu
rnit
ure
&
fitt
ing
s
Moto
r
veh
icle
s
Com
pu
ter
hard
ware
Pro
pert
y
un
der
con
str
ucti
on
Tota
lC
ost
At
1Ja
nuary
2015
39,4
63
14,8
26
16,0
82
4,5
18
7,5
12
14,0
12
7,9
33
104,3
46
Additio
ns
933
847
2,4
01
150
930
1,6
44
533
7,4
38
Recla
ssifi
cation
37
71
366
6205
(247)
(438)
-D
isp
osa
ls/W
rite
-offs
(111)
(409)
(139)
(9)
(742)
(211)
(426)
(2,0
47)
Tra
nsfe
rs-
-(2
,268)
(325)
(1,8
66)
-(1
,621)
(6,0
80)
Recla
ssifi
cation
toin
tangib
leassets
(note
32)
--
--
-(2
06)
-(2
06)
Exch
ang
ed
iffe
rence
s47
88
21
47
27
5-
235
At
31
Decem
ber
20
15
40,3
69
15,4
23
16,4
63
4,3
87
6,0
66
14,9
97
5,9
81
103,6
86
Accu
mu
late
dd
ep
recia
tion
At
1Ja
nuary
2015
1,6
16
4,2
39
14,1
02
2,6
97
4,7
66
11,4
95
-38,9
15
Charg
efo
rth
eyear
393
1,7
55
1,4
65
225
1,1
60
2,1
03
-7,1
01
Dis
posals
(7)
(101)
(135)
(7)
(639)
(209)
-(1
,098)
Tra
nsfe
rs-
-(2
,267)
(323)
(1,7
63)
--
(4,3
53)
Exch
ang
ed
iffe
rence
s4
60
16
42
15
11
-148
At
31
Decem
ber
20
15
2,0
06
5,9
53
13,1
81
2,6
34
3,5
39
13,4
00
-40,7
13
Net
book
am
ou
nt
at
31
Decem
ber
20
15
38
,36
39
,47
03
,28
21
,75
32
,52
71
,59
75
,98
16
2,9
73
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
96
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Gro
up
Leaseh
old
lan
d&
bu
ild
ing
s
Leaseh
old
imp
rovem
en
ts
Pla
nt
&
mach
inery
Fu
rnit
ure
&
fitt
ing
s
Moto
r
veh
icle
s
Com
pu
ter
hard
ware
Pro
pert
y
un
der
con
str
ucti
on
Tota
lC
ost
At
1Ja
nuary
2014
8,6
63
14,8
61
16,9
31
2,8
78
6,5
13
10,3
81
5,3
22
65,5
49
Additio
ns
1,3
78
262
808
114
1,1
58
1,1
33
1,3
22
6,1
75
Acquis
itio
nofsubsid
iary
(note
51)
29,3
92
--
1,5
26
713
1,6
79
1,6
21
34,9
31
At
1Ja
nuary
2014
--
--
-749
260
1,0
09
Recla
ssifi
cation
--
--
-117
(117)
-D
isposals
-(3
24)
(1,6
57)
-(8
77)
(52)
(475)
(3,3
85)
Exch
ang
ediff
ere
nce
s30
27
--
55
-67
At
31
Decem
ber
20
14
39,4
63
14,8
26
16,0
82
4,5
18
7,5
12
14,0
12
7,9
33
104,3
46
Accu
mu
late
dd
ep
recia
tion
At
1Ja
nuary
2014
1,4
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3,7
23
13,3
20
2,5
54
4,8
44
10,1
78
-36,0
26
Charg
efo
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209
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1,0
48
143
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1,0
77
-3,8
47
Recla
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cation
from
inta
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--
--
-287
-287
Dis
posals
-(1
59)
(266)
-(7
73)
(47)
-(1
,245)
At
31
Decem
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20
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1,6
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4,2
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2,6
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4,7
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11,4
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Net
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am
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nt
at
31
Decem
ber
20
14
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,84
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0,5
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1,9
80
1,8
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2,7
46
2,5
17
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S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
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-(2
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Decem
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1,5
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5,8
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34
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Net
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S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
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Decem
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20
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At
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S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
99
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32 Intangible assetsBank
Computer Computer
software software
Cost
At 1 January 2014 5,417 5,229
Additions 209 190
Acquisition of subsidiary 1,886 -
Reclassification to property, plant and equipment & other asset 1 (1,051) (1,051)
At 31 December 2014 6,461 4,368
Acquisitions on business combination - 1,839
Additions 1,091 1,086
Reclassification from property, plant and equipment & other asset 1 206 206
Impairment charge (212) (212)
Exchange differences (14) -
At 31 December 2015 7,532 7,287
Amortisation
At 1 January 2014 (2,334) (2,287)
Amortisation charge (543) (406)
Group
Reclassification to property, plant and equipment 287 287
At 31 December 2014 (2,590) (2,406)
Amortisation charge (1,845) (1,815)
Exchange differences (21) -
At 31 December 2015 (4,456) (4,221)
Net book value
At 31 December 2015 3,076 3,066
At 31 December 2014 3,871 1,962
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
The amount represents N 206 Million (2014: N1,051 Million) reclassified from/to (in 2014) property, plant and
equipment
1
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
100
33 Assets classified as held for sale
31 December 31 December 31 December 31 December
2015 2014 2015 2014
At 1 January 150 217 150 217
Disposals - (67) - (67)
150 150 150 150
Current 150 150 150 150150 150 150 150
34 Due to other financial institutions
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Due to banks in Nigeria 21,029 51,816 21,029 12,498
Due to banks outside Nigeria 12,081 - 10,737 -
33,110 51,816 31,766 12,498
Current 33,110 51,816 31,766 12,498
33,110 51,816 31,766 12,498
35 Deposits from customers
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Current accounts 324,020 352,430 323,569 294,271
Savings account 140,441 129,591 139,209 97,320
Term deposits 149,224 210,221 152,955 174,797
Domiciliary accounts 139,460 260,060 139,149 252,069
753,145 952,302 754,882 818,457
Current 753,145 952,014 754,882 818,169
Non-current - 288 - 288
753,145 952,302 754,882 818,457
Group Bank
The valuations were arrived at by reference to direct market evidence; this is by recourse to analysis of recent sales
transaction of similar properties in similar or comparable location. Due adjustment having been made for special features of
the property where applicable.
An insignificant portion of these assets are still being classified as held for sale as a result of conditions beyond the control of
Skye Bank. In 2015, the assets were actively marketed. However, no firm commitment was received. The assets continue to
be actively marketed at prices that are reasonable and the criteria in IFRS 5 continue to be met. Hence, the assets continue
to be classified as held for sale.
Group Bank
The properties were valued by Diya, Fatimilehin & Co (A-342) (FRC/2013/NIESV/00000000754) and Jide Taiwo & Co
(FRC/2013/NIESV/00000002773) in 2014, independent valuers not related to the bank. Diya, Fatimilehin & Co and Jide
Taiwo are members of the Nigerian Institute of Estate Surveyors and Valuers, and have appropriate qualifications and
experience in the valuation of properties.
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
101
NOTES TO THE FINANCIAL STATEMENTS
37 Borrowings from local and foreign banks/institutions
31 December 31 December 31 December 31 December
2015 2014 2015 2014
CBN - State Bailout Funds (note i) 58,204 - 58,204 -
Central Bank of Nigeria (note ii) 35,556 - 35,556 -
African Export Import Bank (note iii) 19,768 16,703 19,768 16,703
Stanbic IBTC (note iv) 18,520 5,034 18,520 5,034
CBN/BOI intervention fund (note v) 9,607 11,030 9,607 11,030
European Investment Bank (note vi) 10,153 7,171 10,153 7,171
CBN - Excess Crude Account (note vii) 10,000 - 10,000 -
Afrexim Bank (note viii) 9,772 - 9,772 -
Afrexim Bank/Citi Bank/Standard Bank (note ix) 8,582 12,493 8,582 12,493
Islamic Corporation (note x) 3,442 6,744 3,442 6,744
CBN - CACS (note xi) 2,747 8,124 2,747 8,124
Eco Bank Paris (note xii) 2,586 - 2,586 -
NOOR Bank (note xiii) 1,936 - 1,936 -
Diamond Bank (note xiv) 1,295 - 1,295 -
24,280 6,312 24,280 -
African Trade Finance - 17,175 - 17,175
Mashreq Bank - 25,476 - 25,476
United Bank for Africa Plc New York - 11,766 - 11,766
NIMASA Maritime fund - 709 - 709
Emirate NBD Banj PJSC - 2,542 - 2,542
216,448 131,279 216,448 124,967
The derivative liability represents the net present value of the interest rate swap transaction between the bank and JP
Morgan.
Group Bank
The derivative asset represent payment adjusted warrants attached to 6.25% Nigerian Par Bonds issued by the Central
Bank of Nigeria and guaranteed by the Federal Government of Nigeria in 1996. Payment adjusted rights are payable semi-
annually provided the price of bonny light remains above a certain level.
All derivative financial instruments are current in nature.
Foreign loans and borrowings for
letters of credits(note xv)
36 Derivative financial instruments
Notional
amount
Fair value
assets/
(liabilities)
Notional amount Fair value
assets/
(liabilities)
Group
Interest rate swap USD 100Million (335) USD 100Million (288)
Derivative instrument USD 8.5Million 178 - -
Bank
Interest rate swap USD 100Million (335) USD 100Million (288)
31 December 2015 31 December 2014
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
102
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
103
Borrowings
Local 134,634 124,535 134,634 118,223
Foreign 81,814 6,744 81,814 6,744
216,448 131,279 216,448 124,967
Current 106,384 110,830 106,384 110,289
Non-current 110,064 20,449 110,064 14,678
216,448 131,279 216,448 124,967
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
i
ii
iii
iv
v
vi The amount of N 10.2 billion (USD 51 million) (December 2014: N 7.171 billion (USD 42.7 million)) represents the balanceof a global credit granted to Skye bank used for the nance of small and medium sized investment projects in the productiveand human capital sectors in Nigeria. The facility is due to mature in May 2022. The facility is granted at a rate of 6.27%per annum.
This amount represents on-lending facilities to various customers of the bank availed by the Central Bank of Nigeria (CBN).CBN, in a bid to unlock the credit market in Nigeria during the nancial year 2010, approved for disbursement a total sum ofN500 billion Debenture Stock through the Bank of Industry to various participating banks for onward lending to NigerianSME/Manufacturing sector. The bank accessed this fund to the tune of N9.5 billion for Agricultural nancing, N9.1 billion forManufacturing/SME funds and N263 million on Aviation with a term of 15 years at the rate of 1% per annum.
The amount of N18.52 billion (2014: Nil) represents the balance on commercial papers issued by Skye bank to StanbicIBTC. This facility has an average discount rate of 13.56%. These commercial papers have tenors that range between 90 to270 days.
The amount of N19.768 billion (USD100 million) (December 2014: N16.702 billion ( USD100 million)) represents thebalance on term loan facility granted by African Export-Import Bank on the 30th of December 2011 for a period of 7 years.The facility was obtained to fund the Bank's customers engaged in trade and project related activities. The borrowing is tomature in 2018 with interest payment on a quarterly basis in arrears and principal to be repaid in full on nal maturity date.Interest rate of 6.3% per anum plus matching LIBOR for 3 months deposit in US dollars.
The amount of N58.2 billion represents the bailout facilities granted to the Bank by the Central Bank of Nigeria for on-lending to state governments for payment of salaries of the workers of each states. The facility has a tenor of 20 years witha 2% interest rate per annum payable to the CBN. The Bank is under obligation to disburse the loan at an interest rate of9% per annum.
The amount of N35.6 billion represents a short term facility granted to the Bank by the Central Bank of Nigeria. The facilitywas granted to the Bank at an interest rate of Monetary Policy Rate (MPR) +200 basis points for 90 days.
vii The amount of N10 billion represents the excess crude account loan granted to the Bank by the Central Bank of Nigeria foron-lending to state governments. The facility has a tenor of 20 years with a 2% interest rate per annum payable to the CBN.The Bank is under obligation to disburse the loan at an interest rate of 9% per annum.
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
104
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
viii
ix
x
xi
xii
xiii
The balance represent a short term trade nance facility of $15 million availed to Skye Bank Plc by Islamic Corporation forthe Development of Private Sector on 24 October 2014 with a maturity date of 21 July 2016 for an interest rate of 6.25%per annum.
The amount of N2.6 Billion (2014: Nil) represents the balance on a short term loan facility granted to Skye Bank by EcoBank Paris for the nancing of the borrower working capital. The facility is at an interest rate of 3.30%. The tenor is 230days.
This amount of N9.7billion (USD 49 million) represents a short term credit facility granted by African Export-Import Bank on9 November 2015 to Skye bank. The facility was obtained to nance short term trade transactions which includes but notlimited to confirmation of letters of credit, issuing of counter guarantees, purchase of notes availed by Skye Bank andpurchase of invoices guaranteed by Skye Bank. The borrowing is to mature in 2016 with an interest rate of 3% and principalrepayment at maturity.
The amount of N8.582billion (USD 43.78million) (December 2014: N 12.493 billion (USD 74 million)) represents the balanceon a syndicated facility granted on 9th May 2012 for a period of 5 years with an interest rate of LIBOR + 6% with AfricanExport-Import Bank, Citi Bank and Standard Bank as lead banks. Interest and principal are payable quarterly basis.
This represents the outstanding balance on the on-lending facilities provided by the Central Bank of Nigeria through theCommercial Agricultural Credit Scheme (CACS). This is an intervention facility granted by the Central bank of Nigeria incollaboration with the Federal Government of Nigeria. The facility is for a maximum period of 7 years at a zero percentinterest rate to the Bank. The Bank did not provide security for this facility.
This amount of N1.9 billion (USD 9.8 million) (2014: Nil) represents the balance on the facility agreement between Skyebank and NOOR Bank. This facility was granted at an interest rate of 3.824% with maturity date set on 17th August, 2016
xiv
xv Borrowings from correspondence banks include loans from foreign banks utilised in funding letters of credits negotiated onbehalf of Skye Bank's customers for international trade.
This represents the balance on a short term facility of $6.5 Million granted to Skye Bank to facilitate import trade in goodsand services by Nigerian buyers. The Bank wishes to issue letters of credit restricted for negotiation at the counters of, andadvised or conrmed to the respective beneciaries by Diamond Bank UK. The facility was granted at an interest rate of5.69% for 72 days
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
105
38 Current tax liability
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Per statement of profit or loss
Current income tax 1,014 880 663 781
Education tax 14 - - -
Technology tax 19 93 - 93
Prior year under provision 73 404 - 404
Income tax charge 1,120 1,377 663 1,278
Deferred tax 1,960 (644) 1,893 (642)
3,080 733 2,556 636
Per statement of financial positionAt 1 January 5,230 1,058 1,278 1,041
Payments during the year (3,625) (1,096) (2,882) (1,041)
Income tax charge 1,120 1,377 663 1,278Exchange difference (9) - - -
Acquisition of subsidiary (note 51) - 3,891 2,456 -
2,716 5,230 1,515 1,278
38.1 Reconciliation of effective tax rate
31 December 31 December 31 December 31 December
2015 2015 2014 2014
Loss/(Profit) before income tax (37,646) 19,450
Income tax using the domestic tax rate 30% (11,294) 30% 5,835
-66% 24,907 21% 4,006
30% (11,435) -45% (9,204)
0% - 11% 2,053
0% 14 0% -
0% 19 0% 93
0% 73 2% 404
Effect of tax assessment basedon minimum tax law (note 38.1)
-3% 1,014 881
Group
- Expenses not deductible for tax
purposes- Income not subject to tax
- Tax losses for the year
Education tax
Information technology levy
Underprovision in prior years
Bank
Income tax liability is to be settled within one year
Group Group
Exempted permanent differences 17% (6,378) -21% (4,157)
0% - -3% (644)
8% (3,080) -5% (733)
Accelerated capital allowance
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
Reconciliation of effective tax rate
31 December 31 December 31 December 31 December
2015 2015 2014 2014
(Loss)/Profit before income tax (39,867) 9,265
Income tax using the domestic tax rate 30% (11,960) 30% 2,780
-61% 24,156 43% 4,006
24% (9,435) -95% (8,840)
0% - 22% 2,053
0% - 4% 404
0% - 1% 93
-2% 663
7% 782
Exempted permanent differences 15% (5,980) 0% -
0% - -6% (642)
6% (2,556) 6% 636
39 Accruals and other liabilities
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Financial liabilities
Accounts payable 65,573 57,570 61,864 58,142
Customer deposits for letters of credit 215 6,587 215 539
Intercompany payable - - - 47,853
Manager's cheque 3,717 4,249 3,700 3,482
Accrued expenses 7,048 27,569 6,327 202
Uncleared effects 374 201 374 201
Cash card collection settlement 1,661 1,790 1,661 1,790
78,588 97,966 74,141 112,209
Current 65,788 64,157 62,079 106,534
Non-current 12,800 33,809 12,062 5,675
78,588 97,966 74,141 112,209
(i) Movement in litigation claims provision
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Opening balance 3,072 - - -
Additions - - - -
Acquired upon acquisition of Mainstreet - 3,072 3,072 -
Closing balance 3,072 3,072 3,072 -
Group Bank
Effect of tax assessment based onminimum tax law (note 38.1)
Accelerated capital allowance
Based on Nigerian tax law, Company Income Tax Act 2007, current tax is determined as the higher of amount computed
based on the 30% of taxable profit, minimum tax and 30% of dividend declared. For the year ended 31 December 2015, the
Bank tax liability was based on minimum tax.
- Expenses not deductible for tax
purposes
- Income not subject to tax
- Tax losses for the year
Information technology levy
Underprovision in prior years
Group Bank
Bank Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
106
NOTES TO THE FINANCIAL STATEMENTS
40 Deferred tax asset and liability
Deferred income tax assets are attributable to the following items:
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Deferred tax assets:
Property, plant and equipment 290 301 - -
Unrelieved losses 185 156 - -
Allowances for loan losses 6 5 - -
Retirement benefit obligation - 1 - -
481 463 - -
Deferred tax assets:
185 162 - -
296 301 - -
481 463 - -
Deferred income tax liabilities are attributable to the following items:
Liabilities Net Liabilities Assets Net
- - 4,828 - 4,828
- - - - -
- - - 1,624 (1,624)
- - - 2,118 (2,118)
200 200 - - -
2,977 2,977
190 190 139 - 139
3,367 3,367 4,967 3,742 1,225
31 December 2014
Deferred tax assets to be recovered
within 12 months
Deferred tax assets to be recovered
after more than 12 months
Retirement benefit obligation
Investment properties
Net deferred tax liabilities
Unrealised exchange difference
Group
Unrelieved loss
Group Bank
Group
31 December 2015
Property, plant and equipment
Fair value reserves
Allowance for loan losses
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
107
NOTES TO THE FINANCIAL STATEMENTS
Liabilities Net Liabilities Assets Net
- - 4,826 - 4,826
- - - 1,624 (1,624)
- - - 2,118 (2,118)
200 200 - - -
2,977 2,977 - - -
3,177 3,177 4,826 3,742 1,084
31 December 31 December 31 December 31 December
2015 2014 2015 2014
3,177 4,828 3,177 4,826
190 139 - -
3,367 4,967 3,177 4,826
- 3,742 - 3,742
Deferred tax liabilities:
Deferred tax liability to be settled
after more than 12 months
Deferred tax liability to be settled
within 12 months
Deferred tax assets to be recovered after more than
12 months
31 December 2014
Group Bank
Bank
Deferred tax assets
Bank
31 December 2015
Property, plant and equipment
Allowance for loan losses
Unrelieved loss
Retirement benefit obligation
Unrealised exchange differenceNet deferred tax liabilities
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
108
NOTES TO THE FINANCIAL STATEMENTS
Group
Movements in deferred tax assets during the year:
2015
1-Jan-2015
Acquired on
business
combination
Recognised in
P&L 31-Dec-2015
301 - (11) 290
5 - 1 6
156 - 29 185
1 - (1) -
463 - 18 481
2014
1-Jan-2014
Acquired on
business
combination
Reclassification
from deferred
tax liability 31-Dec-2014
- 264 37 301
- - 156 156
- - 5 5
- - 1 1
- 264 199 463
Group
Movements in deferred tax liabilities during the year:
2015
1-Jan-2015
Recognised
in P&L
Recognised in
OCI 31-Dec-2015
4,828 (4,828) - -
Unrelieved losses (2,118) 2,118 - -
Allowances for loan losses (1,624) 1,624 - -
Retirement benefit obligation - - 200 200
- 2,977 - 2,977
Investment properties 139 51 - 190
1,225 1,942 200 3,367
Allowance for loan losses
Employee benefit provision
Property, plant and equipment
Allowance for loan losses
Property, plant and equipment
Unrelieved loss
Property, plant and equipment
Retirement benefit obligation
Unrealised exchange difference
Unrelieved loss
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
109
NOTES TO THE FINANCIAL STATEMENTS
Group & Bank
31 December
2015
(667)
Deferred tax effect 200
(467)
2014
1-Jan-2014
Recognised
in P&L
Acquired on
business
combination
Recognised
in OCI
Reclassification
to deferred tax
asset 31-Dec-2014
Property, plant
and equipment
5,438 (644) - (4) 37 4,827
Unrelieved loss (2,274) - - - 156 (2,118)
Allowance for
loan losses
(1,628) - - - 5 (1,623)
Retirement
benefit
(1) - - 1 -
Investment
properties
- 139 - - 139
1,535 (644) 139 (4) 199 1,225
Actuarial gains recognised in the period gross of tax (Note 42.1b)
Actuarial gains recognised in other comprehensive income net of tax
The movement in the retirement benefit obligation was as follows:
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
110
NOTES TO THE FINANCIAL STATEMENTS
Bank
Movements in deferred tax liabilities during the year:
1-Jan-2015
Recognised in
P/L Recognised in OCI 31-Dec-2015
4,826 (4,826) - -
(2,118) 2,118 - -
(1,624) 1,624 - -
- 2,977 - 2,977
- - 200 200
1,084 1,893 200 3,177
Movements in deferred tax liabilities in 2014:
1-Jan-2014
Recognised in
P/L Recognised in OCI 31-Dec-2014
5,468 (642) - 4,826
Unrelieved loss (2,118) - - (2,118)
(1,624) - - (1,624)
1,726 (642) - 1,084
41 Liabilities on investment contracts
31 December 31 December
2015 2014
- 26
Current - 16
Non-current - 10
- 26
42 Retirement benefit obligation
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Defined contribution plan 99 358 85 354
Defined benefit plan 7,406 6,545 7,406 6,545
7,505 6,903 7,491 6,899
Remeasurements for:
Defined benefit plan (note 42.1) 467 2,360 467 2,360
467 2,360 467 2,360
Allowance for loan losses
Property, plant and equipment
Deferred tax assets of N60Billion as at 31 December 2015 (2014: N14Billion) has not been recognised because it is not
probable that future taxable profits will be available against which they can be utilised.
Allowance for loan losses
Property, plant and equipment
Group Bank
Unrelieved loss
Statement of nancial position obligations for:
Group
Unrealised exchange differenceRetirement benefit obligation
Other managed funds
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
111
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
112
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
NOTES TO THE FINANCIAL STATEMENTS
42.1 Defined benefit plan
The most recent actuarial valuation of the present value of the defined benefit obligation, in respect of the liability as at year
ended 31 December 2015, was carried out by Olurotimi.O. Okpaise (FRC/NAS/00000000738), Associate, Society of
Actuaries, America Fellow, Institute of Actuaries, England on behalf of HR Nigeria Limited.
The income statement charge included within operating profit includes current service cost, interest cost, past service costs
and gains and losses on settlement and curtailment.
The Bank operates an unfunded defined benefit plan for qualifying employees on services rendered. Under the plan, the
employees having served at least 5 years are entitled to a Gratuity of 40% of Annual Gross Salary for each year of service
rendered after the fth year with effect from 1 June, 2011. No other post-retirement benets are provided to theseemployees.
There is no funding arrangement with a trustee for the defined benefit plan as the bank pays for all obligations from its
defined benefit liability as such obligations fall due.
(All amounts in millions of Naira unless otherwise stated)
b. Movement in the present value of defined benefit obligations
31 December 31 December
'2015 '2014
At 1 January 6,545 7,181
Interest cost 964 958
Current service costs 1,102 1,301
Plan amendment - -
Actuarial gains recognised in other comprehensive income (see note 42.1bi) (667) (2,360)
Benefits paid (538) (535)
At 31 December 7,406 6,545
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Defined contribution plan (note 15) 482 688 448 682
Defined benefit plan (note 15) 2,061 2,259 2,061 2,259
2,543 2,947 2,509 2,941
Group & Bank
GroupIncome statement charge included in operating profit
for:
Bank
Actuarial gains recognised in other comprehensive income is analysed below
31 December 31 December 31 December 31 December
2015 2014 2015 2014
i Loss/(gains) from change in assumption 262 (2,489) 262 (2,489)
(Gains)/loss from experience adjustments (729) 129 (729) 129
(467) (2,360) (467) (2,360)
c.
d.
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Long term discount rate (p.a.) 12.5% 15.0% 12.5% 15.0%
Average pay increase (p.a.) 10.0% 12.0% 10.0% 12.0%
Average rate of inflation (p.a.) 9.0% 9.0% 8.0% 9.0%
Retirement age for both male and female 60 years 60 years 60 years 60 years
Withdrawal rate: >=30 years 6% 3% 6% 3%
Withdrawal rate: 31 years - 39 years 5% 5% 5% 5%
Withdrawal rate: 40 years - 44 years 5% 2% 5% 2%
Withdrawal rate: 45 years - 50 years 3% 2% 3% 2%
Withdrawal rate: 51 years above 3% 0% 3% 0%
Group Bank
The principal assumptions used for the purpose of the actuarial valuations were as follows.
Projected benefit expenses in respect of current service cost and interest cost on defined benefit obligation for year 2015 are
N1.10 billion and N964.33 million respectively. Had the plan discontinued as at 31 December 2015, the estimated accrued
benefits payable is N4.85 billion.
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
113
Sample age
2015 2014 2015 2014
25 7 7 7 7
30 7 7 7 7
35 9 9 9 9
40 14 14 14 14
45 26 26 26 26
2015 Group and Bank
Increase in
assumption
by 1%
Liability
changes to
Decrease in
assumption by
1%
Liability
changes to
Discount rate Decrease in
liability by N738
Million
6,668 Increase in
liability by N860
Million
8,266
Salary growth Increase in
liability by N791
Million
8,316 Decrease in
liability by N910
Million
6,615
Age rated up
by 1 year
Age rated down
by 1 year
Mortality Increase in
liability by N1
Million
7,407 Decrease in
liability by N1
Million
7,405
2014 Group and Bank
Increase in
assumption
by 1%
Liability
changes to
Decrease in
assumption by
1%
Liability
changes to
Discount rate Decrease in
liability by
731Million
5,814 Increase in
liability by
N858Million
7,403
Salary growth Increase in
liability by
N781Million
7,453 Decrease in
liability by
N908Million
5,764
Age rated up
by 1 year
Age rated down
by 1 yearMortality Increase in
liability by
N3Million
6,548 Decrease in
liability by
N3Million
6,542
Bank
Number of deaths in year of age out of 10,000 lives
Group
The rates of mortality assumed for employees are the rates published in the A67/70 Ultimate Tables, published jointly by
the Institute and Faculty of Actuaries in the UK as shown below
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Impact on defined benefit obligation
Impact on defined benefit obligation
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
114
NOTES TO THE FINANCIAL STATEMENTS
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the pension liability recognised within the statement of nancial position. The methods andtypes of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.
e Risk exposure
i Changes in bond yields
Curtailment
43 Share capital and reserves
a Share capital
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Authorised
12,500 12,500 12,500 12,500
Bank
With effect from 1 January 2016, the Group discontinued the Scheme for all staff and increased employer's contribution inrespect of their existing contibution plan under the 2014 Pension Reform Act. This was communicated to all staff in March2016. The liability from the scheme was estimated at N4.85 billion.
25 billion ordinary shares of 50k each
(31 December 2014: 25 billion ordinary shares of
50k each)
Group
The group is exposed to a number of risks, the most significant of which are detailed below:
The rate used to discount post-employment benefit obligations is determined with reference to market yields at the balance
sheet date on high quality corporate bonds. In countries where there is no deep market in such bonds, the market yields on
government bonds are used. The Group is of the opinion that there is no deep market in Corporate Bonds in Nigeria and as
such assumptions underlying the determination of discount rate are referenced to the yield on Nigerian Government bonds
of medium duration, as compiled by the Debt Management Ofce. A decrease in Nigerian Government Bond yieldswill increase the plan’s liabilities.
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
115
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
116
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
Issued and fully paid
31 December 31 December
2015 2014
Balance, beginning of year 6,609 6,609
Issued during the year (bonus issue) 331 -
Balance, end of year 6,940 6,609
Bank
Number of shares 13,219
1 new share for every 20 661
New number of shares 13,880
b) Share premium
Share premium is the excess paid by shareholders over the nominal value of their shares
c Other reserves
i Capital reserve
The movement in the number of shares are as follows:
The sum of N7,503 million represents the surplus of nominal value of the reconstructed shares transferred from the share
capital. The consolidation of 3,751,522,394 ordinary shares of N1.00 each was sub-divided into 7,503,044,788 ordinary
shares of 50 kobo each and were credited as fully paid, and rank paripassu in all respect in the capital of the Bank. The
reconstructed shares were allocated to shareholders in the ratio of one (1) reconstructed ordinary shares of 50 kobo each
for every three (3) ordinary shares of 50 kobo each previously held by them.
The bank issued 661 million bonus shares in the proportion of 1 for 20 for the year ended 31 December 2015.
The movement on the issued and fully paid up share capital account during the year was as follows:
Bank
ii Statutory reserve
iii Small and medium scale industries equity investment scheme (SMEEIS) reserves
Nigerian banking regulations require the bank to make an annual appropriation to a statutory reserve. As stipulated by
S16(1) of the Bank and Other Financial Institutions Act, CAP B3 Laws of the Federation of Nigeria (amended), an
appropriation of 30% of profit after taxation is made if the statutory reserve is less than the paid-up share capital and 15%
of profit after taxation if the statutory reserve is greater than the paid up share capital.
The SMEEIS reserve is maintained to comply with the Central Bank of Nigeria (CBN) requirement that all licensed banks set
aside a portion of the profit after taxation in a fund to be used to finance equity investments in qualifying small and medium
scale enterprises. Under the terms of the guideline (amended by CBN letter dated 11 July 2006), the contributions will be
10% of profit after taxation and shall continue after the first 5 years but banks’ contributions shall thereafter reduce to 5%
of profit after taxation. However, this is no longer mandatory. The small and medium scale industries equity investment
scheme reserves are non-distributable. No appropriation was made to the SMEEIS reserve during the year.
iv Available for sale reserve
v Regulatory reserve
vi Translation reserve
vii Treasury reserve
d Non-controlling interest
The risk regulatory risk reserves warehouses the difference between the allowance for impairment losses on balance onloans and advances based on Central Bank of Nigeria prudential guidelines and Central Bank of the foreign subsidiaries
regulations, compared with the loss incurred model used in calculating the impairment under IFRSs.
This represents the group's share of exchange differences relating to the translation of the results and net assets of thegroup’s foreign operations.
The fair value reserve includes the net cumulative change in the fair value of available for sale investments until the
investment is derecognised or impaired.
Treasury reserve represent the initial purchase cost of the bank's shares of 242,732,870 units (31 December 2014:
242,732,870 units) held by the share trust scheme as at 31 December 2015. The share trust scheme exists for the
management of staff performance incentive.
This represents the non-controlling interest's (NCI) portion of the net assets of the Group.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
117
44 Cash generated from operations
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Operating profit before tax (37,646) 19,450 (39,867) 9,265
Adjustments for:
Depreciation of property and equipment 7,101 3,847 6,930 3,718
Amortisation of intangible assets 1,845 543 1,815 406
(Loss)/gain on disposal of property and equipment 77 (201) 92 (201)
(555) (631) (555) (631)
(703) (1,008) (712) (1,008)
Impairment on loans and advances 27,536 18,992 28,706 19,706
Impairment on other financial assets 7,145 1,959 6,251 1,959
Impairment of intangible assets 212 - 212 -
2,543 2,947 2,509 2,941
Net interest income (50,915) (63,275) (47,474) (62,586)
(10,633) (1,253) (9,922) (1,251)
- (8,976) -
Dividend income (317) (18) (264) (18)
(54,310) (27,624) (52,279) (27,700)
Changes in operating assets
18,641 (9,940) 7,106 (589)
Derivative financial instruments 47 39 47 39
Pledged assets (1,957) (3,432) (1,957) (3,431)
Restricted deposits 82,652 (111,012) 44,083 (111,012)
(104,629) (82,210) (94,252) (80,353)
6,881 51,489 54,551 3,726
Changes in operating liabilities
(26,552) 12,532 (33,668) 12,533
(195,523) (448) (191,540) (2,130)
Accruals and other liabilities (17,137) 40,266 (64,379) 87,793
Investment contract liabilities (26) - - -
(239,238) 52,350 (289,587) 98,196
Remittance to pension fund administrators (712) (725) (712) (725)
Payment to gratuity benefit holders (538) (535) (538) (535)
Interest paid on deposits and borrowings (71,609) (37,914) (71,967) (37,837)
Interest received on loans and advances 99,400 93,119 97,920 92,780
(265,372) (76,395) (307,585) (67,441)
(3,625) (1,096) (2,882) (1,041)
Net cash used in operating activities (268,997) (77,491) (310,467) (68,482)
Loans and advances to customers
Due from other financial institutions
Prepayments and other assets
Net fair value gain on financial assets held for
trading
Reconciliation of profit before tax to cash generated
from operations:
Group Bank
Net (gain)/loss on disposal of available for sale
equity investment securities
Income tax paid
Additional gratuity provision
Bargain purchase
Unrealised foreign exchange loss on revaluation
Deposits from customers
Financial assets held for trading
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
118
NOTES TO THE FINANCIAL STATEMENTS
45 Segment reporting
45.1 Operating segments by business segment
Retail banking
Commercial banking
Treasury, Corporate and Investment banking
The Group is divided into three main business segments, as described below, which are the Group's strategic business
units. The strategic business units offer varied products and services and are managed separately based on the GroupManagement's structure.
Operating segments are reported in accordance with the internal reports provided to the Group's Executive
Management Committee which is responsible for allocating resources to the operating segments and assessing its
performance.
Retail banking incorporates private banking services, private customer current accounts, deposits, investment savings
products, custody, credit and debit cards, consumer loans and mortgages.
Commercial banking incorporates direct debit facilities, current accounts, deposits, overdrafts, loan and other credit
facilities, foreign currency and derivative products.
Treasury, corporate and investment banking incorporates financial instruments trading, structured financing and
corporate leasing.
No single external customer accounts for 10% or more of the Group’s revenue.
Information regarding the results of each reportable segment is included below. Performance is measured based on
segment profit before income tax, as included in the internal management reports that are reviewed by the Executive
Management Committee. Segment profit is used to measure performance as management believes that such
information is the most relevant in evaluating the results of certain segments relative to other entities that operate
within these industries. Inter-segment pricing is determined on an arm’s length basis.
The measurement policies the Group uses for segment reporting are the same as those used in its financial statements.
There have been no changes from prior periods in the measurement methods used to determine reported segment
profit or loss.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
119
NOTES TO THE FINANCIAL STATEMENTS
Group
31 December 2015Retail banking Commercial
banking
Treasury
corporate
Unallocated Total
Revenue:Derived from external customers 21,909 49,192 92,777 - 163,878
Derived from other business segments 413 345 (758) - -
Total revenue 22,322 49,537 92,019 - 163,878
Interest expenses (5,597) (27,537) (43,859) - (76,993)
Fee and commission
expenses
(163) (504) (1,134) - (1,801)
Net operating income 16,562 21,496 47,026 - 85,084
Expense:(7,324) (11,181) (19,724) - (38,229)
(6,132) (10,052) (24,690) - (40,874)
(1,692) (7,557) (25,432) - (34,681)
- - - (8,946) (8,946)
Total cost (15,148) (28,790) (69,846) (8,946) (122,730)
1,414 (7,294) (22,820) (8,946) (37,646)
Income tax expense - - - (3,080) (3,080)
1,414 (7,294) (22,820) (12,026) (40,726)
AssetsLoans and advances to customers 62,104 274,383 368,409 - 704,896
Others 47,066 116,978 330,457 - 494,501
Total assets 109,170 391,361 698,866 - 1,199,397
LiabilitiesDeposits from customers 316,321 263,601 173,223 - 753,145
Others 3,416 116,147 222,506 - 342,069
Total liabilities 319,737 379,748 395,729 - 1,095,214
Loan impairment charges and
impairment charges on other financial
assetsDepreciation and amortisation
Profit/(loss) before income tax fromreportable segments
Loss after income tax from
reportable segments
Employee benefit and compensation cost
Administration and general expenses
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
120
NOTES TO THE FINANCIAL STATEMENTS
Group
31 December 2014Retail banking Commercial
banking
Treasury
corporate
Unallocated Total
Revenue:Derived from external customers 13,210 45,893 77,639 - 136,742
Derived from other business segments 497 279 (776) 8,976 8,976
Total revenue 13,707 46,172 76,863 8,976 145,718
Interest expenses (1,783) (13,817) (28,972) - (44,572)
Fee and commission expenses (452) (867) (565) - (1,884)
Net operating income 11,472 31,488 47,326 8,976 99,262
Expense:(2,322) (7,280) (10,074) - (19,676)
Administration and general expenses (4,133) (12,957) (17,705) - (34,795)
(1,467) (4,190) (15,294) - (20,951)
Depreciation and amortisation - - - (4,390) (4,390)
Total cost (7,922) (24,427) (43,073) (4,390) (79,812)
Profit before income tax
from reportable segments
3,550 7,061 4,253 4,586 19,450
Income tax expense - - - (733) (733)
3,550 7,061 4,253 (733) 18,717
AssetsLoans and advances to customers 20,688 303,640 321,446 - 645,774
Others 80,211 162,485 499,797 - 742,493
Total assets 100,899 466,125 821,243 - 1,388,267
LiabilitiesDeposits from customers 228,551 485,675 238,076 - 952,302
Others 42,107 122,665 129,961 - 294,733
Total liabilities 270,658 608,340 368,037 - 1,247,035
Profit after income tax from
reportable segments
Loan impairment charges and
impairment charges on other financial
assets
Employee benefit and compensation cost
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
121
NOTES TO THE FINANCIAL STATEMENTS
Bank
31 December 2015Retail banking Commercial
banking
Treasury
corporate
Unallocated Total
Revenue:Derived from external customers 19,268 48,443 91,800 - 159,511
Derived from other business segments 413 345 (758) - -
Total revenue 19,681 48,788 91,042 - 159,511
Interest expenses (5,597) (27,892) (44,596) - (78,085)
Fee and commission expenses (161) (494) (1,130) - (1,785)
Net operating income 13,923 20,402 45,316 - 79,641
Expense:(7,000) (10,779) (19,343) - (37,122)
(5,349) (9,453) (23,882) - (38,684)
(1,740) (7,660) (25,557) - (34,957)
- - - (8,745) (8,745)
Total cost (14,089) (27,892) (68,782) (8,745) (119,508)
(166) (7,490) (23,466) (8,745) (39,867)
Income tax expense - - - (2,556) (2,556)
(166) (7,490) (23,466) (11,301) (42,423)
AssetsLoans and advances to customers 63,036 273,157 364,210 - 700,403
Others 43,299 110,653 327,149 - 481,101
Total assets 106,335 383,810 691,359 - 1,181,504
LiabilitiesDeposits from customers 319,630 267,604 167,648 - 754,882
Others 4,503 108,821 221,550 - 334,874
Total liabilities 324,133 376,425 389,198 - 1,089,756
Loss after income tax from
reportable segments
Loss before income tax from reportable
segments
Employee benefit and compensation cost
Loan impairment charges and
impairment charges on other financial
assetsDepreciation and amortisation
Administration and general expenses
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
122
NOTES TO THE FINANCIAL STATEMENTS
Bank
31 December 2014Retail banking Commercial
banking
Treasury
corporate
Unallocated Total
Revenue:Derived from external customers 13,115 45,618 76,713 - 135,446
Derived from other business segments 491 276 (767) - -
Total revenue 13,606 45,894 75,946 - 135,446
Interest expenses (1,780) (13,793) (28,922) - (44,495)
Fee and commission expenses (444) (855) (556) - (1,855)
Net operating income 11,382 31,246 46,468 - 89,096
Expense:(2,293) (7,206) (9,982) - (19,481)
Administration and general expenses (4,073) (12,799) (17,689) - (34,561)
(1,517) (4,333) (15,815) - (21,665)
(399) (1,389) (2,336) - (4,124)
Total cost (8,282) (25,727) (45,822) - (79,831)
3,100 5,519 646 - 9,265
Income tax expense (636) (636)
3,100 5,519 646 (636) 8,629
AssetsLoans and advances to customers 20,681 277,222 300,294 - 598,197
Others 64,961 119,780 426,695 - 611,436
Total assets 85,642 397,002 726,989 - 1,209,633
LiabilitiesDeposits from customers 196,430 417,413 204,614 - 818,457
Others 166,856 111,835 (19,468) - 259,223Total liabilities 363,286 529,248 185,146 - 1,077,680
Loan impairment charges and
impairment charges on other financial
assetsDepreciation and amortisation
Profit before income tax from reportable
segments
Profit after income tax from
reportable segments
Employee benefit and compensation cost
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
123
NOTES TO THE FINANCIAL STATEMENTS
- --
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
124
NOTES TO THE FINANCIAL STATEMENTS
45.2 By geographical segment
Group
31 December 2015Nigeria Others Total
Derived from external customers 160,949 2,929 163,878
Derived from other segments - - -
Total revenue 160,949 2,929 163,878
Interest expense (76,851) (142) (76,993)
Fee and commission expense (1,796) (5) (1,801)
Net operating income 82,302 2,782 85,084
Expense:Employee benefit and compensation cost (37,922) (307) (38,229)
Administration and general expenses (40,046) (828) (40,874)
(33,817) (864) (34,681)
Depreciation and amortisation (8,788) (158) (8,946)
Total cost (120,573) (2,157) (122,730)
The Group’s business is organized along two main geographical areas:
i. Nigeria
ii. Others
Transactions between the business segments are on normal commercial terms and conditions.
Funds are ordinarily allocated between segments, resulting in funding cost transfers disclosed in operating income.
Interest charged for these funds is based on the Group’s cost of capital. There are no other material items of income orexpense between the business segments.
Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue
sharing agreements are used to allocate external customer revenues to a segment on a reasonable basis. Revenues are
allocated to geographical areas by destination according to the location of the customer.
Loan impairment charges and
impairment charges on other financial
assets
(Loss)/Profit before income tax from reportable segments (38,271) 625 (37,646)
Income tax expense (3,039) (41) (3,080)
Profit after income tax from reportable segments (41,310) 584 (40,726)
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
AssetsLoans and advances to customers 701,747 3,149 704,896Others 480,727 13,774 494,501Total assets 1,182,474 16,923 1,199,397
LiabilitiesDeposits from customers 746,030 7,115 753,145
Others 336,772 5,297 342,069Total liabilities 1,082,802 12,412 1,095,214
The amounts reported are based on the financial information that is used to produce the Group's financial statements.
The required information on split of non-current assets by geography is not available and the cost to develop it would
be excessive.
NOTES TO THE FINANCIAL STATEMENTS
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
125
46 Related parties
(a) Related party transactions
(b) Subsidiaries
(c) Transactions with key management personnel
46.1 Key management compensation
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Short-term employee benefits 739 645 711 444Post-employment benefits:
Gratuity benefits paid - 331 - 331Pension contributions 8 6 8 6
747 982 719 781
The group is controlled by Skye Bank Plc (incorporated in Nigeria) who is also the ultimate parent.
Parties are considered to be related if one party has the ability to control the other party or to exercise influence
over the other party in making financial and operational decisions, or one other party controls both. The definition
includes subsidiaries, associates, joint ventures and the Group's pension schemes, as well as key management
personnel.
Transactions between Skye Bank Plc and its subsidiaries also meet the definition of related party transactions.
Where these are eliminated on consolidation, they are not disclosed in the consolidated financial statements but
are disclosed in the books of the Bank. Interest in subsidiaries are set out in note 31b.
The group's key management personnel, and persons connected with them, are also considered to be related
parties. The denition of key management includes the close members of family of key personnel and any entityover which they exercise control. The key management personnel have been identified as executive and non-
executive directors of the Group as well as their close family members. Close members of family are those familymembers who may be expected to influence, or be influenced by that individual in their dealings with Skye Bank
Plc and its subsidiaries.
The compensation paid to key management is shown below:
Balances and transactions between the bank and its subsidiaries, which are related parties of the bank, have been
eliminated on consolidation and are not disclosed in this note. Details of transactions between the group and other
related parties are disclosed below.
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
126
NOTES TO THE FINANCIAL STATEMENTS
46.2 Companies'/directors' related deposit liabilities
Directors (and close
family members)
Balance, beginning of year 2,521
Net movement during the year 1,591
Balance, end of year 4,112
46.3 Subsidiaries deposit account balances
Name of company 31 December 31 December
2015 2014
Skye Bank Sierra Leone - 29,666
Skye Bank Guinea 2 -
Skye Bank Gambia - -
Mainstreet Bank Estate Company Ltd 30 -
Mainstreet Insurance Brokers Company Ltd 723 -
Mainstreet International Finance - -
Mainstreet Microfinance Bank Ltd 281 -
Mainstreet BDC Ltd 710 -
Mainstreet Securities Ltd 731 -
Mainstreet Capital Markets Ltd 1,505 -
Mainstreet Registrar Ltd 2,696 -
Mainstreet Trustees and Asset Management
Company Ltd
4,117 -
10,795 29,666
See note 27 and 39 for intercompany payable and receivable.
Interest rates charged on balances outstanding are at rates that would be charged in the normal course of business.
There are no special considerations for the related party deposits. Deposits from related parties are taken at arms length.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
127
NOTES TO THE FINANCIAL STATEMENTS
46
.4R
isk
assets
ou
tsta
nd
ing
Nam
eo
f
com
pan
y/
ind
ivid
ual
Rela
tion
sh
ipTyp
e3
1D
ecem
ber
20
15
31
Decem
ber
20
14
Natu
reof
secu
rity
an
d
secu
rity
sta
tus
Pre
mie
reAcadem
y
Inte
rnational
Akin
sola
Akin
fem
iwa
(Ex-D
irecto
r)
Term
Loan
and
overd
raft
512
30
Legalm
ort
gage
Ikaba
Hote
lsLim
ited
Brig.G
en
Anth
ony
Ukpo
(Ex-D
irecto
r)
Term
Loan
-190
Legalm
ort
gage
OgeyiPla
ce
Hote
lLim
ited
Brig.
Gen
Anth
ony
Ukpo
(Ex-D
irecto
r)
Term
Loan
and
Overd
raft
-2,0
04
Legalm
ort
gage
and
debentu
re
New
cro
ss
Explo
ration
and
Pro
duction
Dr
Jason
Fadeyi
Term
Loan
9,8
04
8,3
50
Asset
debentu
re
Pan
Ocean
Oil
Corp
ora
tion
Dr
Jason
Fadeyi
Term
Loan
21,5
05
17,0
77
Asset
debentu
re
PPP
Flu
idM
echanic
sLim
ited
Dr.
Tunde
Ayeni
Term
Loan
and
Overd
raft
5,7
74
11,1
70
Dom
icilia
tion
Media
Lin
kLim
ited
Gbenga
Adem
ule
gun
Term
Loan
-46
Legalm
ort
gage
Kats
ala
Nig
.Ltd
.M
r.M
ichaelTarf
aO
verd
raft
98
219
Legalm
ort
gage
Inte
gra
ted
Energ
yand
Dis
trib
ution
and
Dr.
Tunde
Ayeni
Term
Loan
and
Overd
raft
10,8
38
9,0
61
Fix
ed
and
floating
debentu
reon
all
the
com
pany's
assets
JKK
Onew
are
Ltd
Dr.
Tunde
Ayeni
Advance
and
Term
loan
673
Legalm
ort
gage
Olu
toylEsta
teD
evt
Lim
ited
Dr.
Tunde
Ayeni
Overd
raft
88
-Legalm
ort
gage
Ocean
Marine
Security
Lim
ited
Dr.
Tunde
Ayeni
Overd
raft
285
432
Legal
mort
gage
NATCO
MD
evelo
pm
ent
&
Investm
ent
Ltd
Dr.
Tunde
Ayeni
Overd
raft
680
-Legal
mort
gage
Maw
eServ
ices
Ltd
Dr.
Tunde
Ayeni
Overd
raft
3-
Legal
mort
gage
and
debentu
re
Dem
anta
Nig
eria
Lim
ited
Mrs
Ibiy
eEkong
Advance
and
Term
loan
150
170
Cash/l
egalm
ort
gage
DV
Media
Nig
eria
Lim
ited
Mrs
Ibiy
eEkong
Advance
&Lease
and
Term
Loan
51
58
Lie
non
deposits
The
Gro
up
gra
nte
dvarious
cre
dit
facilitie
sto
com
panie
sw
hose
directo
rsare
als
odirecto
rsofSkye
Bank
Plc
.at
rate
sand
term
scom
para
ble
tooth
er
facilitie
sin
the
Gro
up's
port
folio.
An
aggre
gate
ofN
50
bn
(2014:
N52
bn)
was
outs
tandin
gon
these
facilitie
sat
the
end
ofth
eperiod.
This
dis
clo
sure
isin
com
pliance
with
the
requirem
ents
ofth
eBankin
g
and
Oth
er
Fin
ancia
lIn
stitu
tions
Act
(BO
FIA
)and
IAS
24.
The
table
belo
wpro
vid
es
furt
her
deta
ils:
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
128
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
Nam
eo
f
com
pan
y/
ind
ivid
ual
Rela
tion
sh
ipTyp
e3
1D
ecem
ber
20
15
31
Decem
ber
20
14
Natu
reof
secu
rity
an
d
secu
rity
sta
tus
One
and
Only
RealEsta
teM
rsIb
iye
Ekong
Overd
raft
and
Advance
5-
Legal
mort
gage
Tw
enty
Tw
oTen
Nig
eria
Lim
ited
Mrs
Ibiy
eEkong
Term
Loan
-5
Lie
non
fixed
deposit
Fin
icky
World
Lim
ited
Mrs
Onasanya
(Ex-D
irecto
r)Term
Loan
and
Overd
raft
17
42
Debentu
re
Onas
Farm
Lim
ited
Mrs
Onasanya
(Ex-D
irecto
r)Term
Loan
26
36
Legalm
ort
gage
and
debentu
re
DLK
and
Sons
Ente
rprises
Tim
oth
yO
gunta
yo
Term
Loan
47
-Legalm
ort
gage
Sw
anlu
xN
igeria
Lim
ited
Mr
Alu
ko
Moses
Ola
kunle
Term
Loan
and
Overd
raft
182
301
Legalm
ort
gage
Sw
anlu
xN
igeria
Lim
ited
Mr
Alu
ko
Moses
Ola
kunle
Advance
54
-Legalm
ort
gage
Tabik
Glo
balServ
ices
Lim
ited
Tim
oth
yO
gunta
yo
Term
Loan
10
20
Legalm
ort
gage
Masco
Agro
Allie
dIn
dustr
ies
Lim
ited
Vin
ay
Tute
jaTerm
Loan
-570
Tru
st
Receip
t
Mega
Boom
Nig
eria
Lim
ited
Vin
ay
Tute
jaTerm
Loan
-347
LegalM
ort
gage
Popula
rFarm
s&
Mills
Lim
ited
Vin
ay
Tute
jaO
verd
raft
-2
LegalM
ort
gage
Pre
miu
mSeafo
ods
Lim
ited
Vin
ay
Tute
jaO
verd
raft
-3
LegalM
ort
gage
and
Debentu
re
Sta
llio
nN
igeria
Lim
ited
Vin
ay
Tute
jaTerm
Loan
582
1,6
85
Legalm
ort
gage
and
debentu
re
Pastu
reTra
vels
and
Tours
Dotu
nAdeniy
iO
verd
raft
3-
LegalM
ort
gage
Segun
Olo
ketu
yi
Segun
Olo
ketu
yi(E
x-D
irecto
r)Term
Loan
--
LegalM
ort
gage
Mrs
Ibiy
eEkong
Mrs
Ibiy
eEkong
Term
Loan
19
31
Dom
icili
atio
nof
fun
ds
Mr
Dotu
nAdeniy
iM
rD
otu
nAdeniy
iTerm
Loan
30
35
Dom
icili
atio
nof
fun
ds
Mr
Tim
oth
yO
gunta
yo
Mr
Tim
oth
yO
gunta
yo
Term
Loan
112
47
Dom
icili
atio
nof
fun
ds
Mrs
Am
aka
Onw
ughalu
Mrs
Am
aka
Onw
ughalu
Term
Loan
23
31
Dom
icili
atio
nof
fun
ds
Mrs
Abim
bola
Izu
Mrs
Abim
bola
Izu
Term
Loan
72
-D
om
icili
atio
nof
fun
ds
Mrs
Mark
ieId
ow
uM
rsM
ark
ieId
ow
uTerm
Loan
31
-D
om
icili
atio
nof
fun
ds
Mr
Bayo
Sanni
Mr
Bayo
Sanni
Term
Loan
83
-D
om
icili
atio
nof
fun
ds
Tra
veltro
nN
igeria
Lim
ited
Mr.
Kehin
de
Duro
sin
mi-
Ett
iTerm
Loan
9-
LegalM
ort
gage
TSI
Pro
pert
yand
Investm
ent
Com
pany
Ltd
Brig.
Gen
Anth
ony
Ukpo
(Rtd
)O
verd
raft
73
-LegalM
ort
gage
51
,17
25
2,0
35
All
risk
assets
are
perf
orm
ing
as
at
the
end
ofth
ere
port
ing
periods
pre
sente
d.
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
129
NO
TE
S T
O T
HE
FIN
AN
CIA
L S
TA
TE
ME
NT
S
46.4 Risk assets outstanding
Directors' off balance-sheet engagement
Name of
company/Individual
Relationship Type 31
December
2015
31
December 2014
Pasture Travel & Tours Mr. Dotun Adeniyi Bank Guarantee 50 50
Newcross Petroleum Limited Dr. Jason Fadeyi Performance Bond - 712
Traveltron Nigeria Limited Mr. Kehinde Durosinmi-Etti Bank Guarantee 4 3
Stallion Nigeria Limited Vinay Tuteja Customs Bond 670 200
Stallion Nigeria Limited Vinay Tuteja LC Establishment 16,653 11,741
NATCOM Development &
Investment Limited
Dr. Tunde Ayeni Bank Guarantee 1,892 -
NATCOM Development &
Investment Limited
Dr. Tunde Ayeni LC Establishment 3,821 -
Olutoyl Estate Devt Limited Dr. Tunde Ayeni Bank Guarantee 3,375 -
PPP Fluid Mechanics Limited Dr. Tunde Ayeni Customs Bond 980 233
Metropolitan Construction
Company Limited
Alh. Musiliu Smith Bid Bond 58 -
Metropolitan Construction
Company Limited
Alh. Musiliu Smith APG Issuance 1,100 -
28,603 12,939
47 Contingent liabilities and commitments
47.1 Legal proceedings
47.2 Capital commitments
47.3
The Group in the ordinary course of business is presently involved in 750 (2014: 420) litigation suits.
There were contingent liabilities in respect of claims and litigations against the group as at 31 December 2015 amounting
to N119 billion (2014: N77 billion). These claims arose in the normal course of business and are being contested by the
bank. The directors having sought the advice of professional legal counsel and are of the opinion that no significant
liability will crystallize from these cases. A provision of N3.4 bn has been made for the year ended 31 December 2015.
In the normal course of business, the Group is party to nancial instruments with off-balance sheet risk - Bankers’ acceptances,performance bonds and indemnities. The instruments are used to meet the credit and other financial requirements of
customers.
The Directors are of the opinion that none of the aforementioned cases is likely to have a material adverse effect on thebank and are not aware of any other pending or threatened claims and litigations.
At the balance sheet date, the group had no (2014: N2.9 billion) capital commitments in respect of authorized and
contracted capital projects for information technology equipment and software.
Off-balance sheet engagements
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
130
NOTES TO THE FINANCIAL STATEMENTS
47 Contingent liabilities and commitments continued
Nature of instruments
31 December 31 December 31 December 31 December
2015 2014 2015 2014
Performance bonds and guarantees 75,339 64,983 75,280 61,664
Letters of credit 31,352 17,691 31,352 15,608
106,691 82,674 106,632 77,272
48 Statement of prudential adjustment
Reference Specific Collective/
General
Total
a. Loans and advances
Provision per CBN Guidelines 32,841 13,102 45,943
Impairment allowance per IAS 39 22.1 25,678 11,575 37,253
Amount required in regulatory risk reserve 7,163 1,527 8,690
49 Events after the reporting period
50 Dividends
Guarantees and letters of credit are given as security to support the performance of a customer to third parties. As
the Group will only be required to meet these obligations in the event of the customer’s default, the cash
requirements of these instruments are expected to be considerably below their nominal amounts.
The dividends paid in 2015 and 2014 were Nil and N3,966Million (30k per share) respectively.
In the current reporting period, the Bank did an assessment of the balance in its regulatory risk reserve and an
additional charge of N8.7 Billion was passed to regulatory risk reserve from retained earnings.
The reconciliation between the December 2015 CBN recommended provisions and that under IFRS as at December
2015 is as shown in the table below:
There were no events after the reporting period which require adjustment to, disclosure in, these financial statements.
The gratuity scheme was discontinued in 2016, after the reporting date.
Other contingent liabilities include transaction related customs and performances bond and are, generally,
commitments to third parties which are not directly dependent on the customer’s creditworthiness. Documentary
credits commit the Group to make payments to third parties, on production of documents, which are usually
reimbursed immediately by customers. The following tables summarises the nominal principal amount of contingent
liabilities and commitments.
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
131
NOTES TO THE FINANCIAL STATEMENTS
51 Acquisition of Mainstreet Bank Group
Differences in accounting policies were deemed immaterial to the Skye Bank Group. The identiable assets and liabilitiesarising from the acquisition as at the reporting dates are as follows:
In December 2014, Skye Bank Plc. acquired a 100% equity interest in Mainstreet Bank Group, a commercial bank
incorporated in Nigeria which has subsidiaries all over Nigeria and outside Nigeria.
As at December 2014, the initial acquisition accounting for the business combination was yet to be finalised, hence the
amounts disclosed were provisional. This was as a result of an exercise to assess the fair value of assets and liabilities, and
thus, properly allocate the purchase price. The measurement period came to an end in December 2015.
The preliminary allocation of the consideration to the carrying value of net assets resulted in an initial positive goodwill of
N30.7bn. This goodwill is not deductible for tax purposes. The main reasons for the recognition of this goodwill are the
expected synergies through combining a highly skilled workforce, anticipated additional income, increased shareholder value
through higher returns on equity as well as increased market presence in Nigeria.
The profit made by the acquiree during the year was not consolidated as the acquisition date is the same as the reporting
date, that is 31 December 2014. If acquisition had been as of the beginning of the annual reporting period, the acquiree
would have contributed interest income of N31.8bn and profit after tax of N6.4bn in the Group's income statement for the
year.
The fair value exercise was completed in November 2015. As a consequence of this, the comparative information for 2014
has been adjusted retrospectively to decrease the fair value of the other liabilities at the acquisition date by N41 billion,
offset by a decrease to goodwill of N39 billion, giving rise to a bargain purchase of N8.98 billion.
Assets acquired
31 December 31 December
2015 2014
Final Provisional
Fair value Fair value
Cash and short term funds 46,071 46,071
Due from banks and other financial institutions 15,926 15,926
Financial assets held for trading 7,547 7,547
Assets under repurchase agreements 9,352 9,352
Pledged assets 56,104 56,104
Loans and advances 46,476 51,963
Investment securities:
- Available for sale investments 5,697 2,639
- Held to maturity investments 66,620 66,620
Prepayment and other assets 50,231 50,231
Intangible assets - software 1,886 1,886
Property, plant and equipment 34,932 34,932
Trading properties 3,866 3,595
Investment properties 1,995 1,971
Deferred tax assets 264 264
Assets 346,967 349,101
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
132
NOTES TO THE FINANCIAL STATEMENTS
b Integration of Mainstreet Bank Ltd
The acquired business, Mainstreet Bank Group, has subsidiaries whose financial information have been consolidated in
arriving at the fair values of acquired assets and liabilities. The non controlling interest of N138Million represents share of
net assets acquired attributable to non-wholly owned subsidiaries. These are listed in note 30b.
The cash and balances with central bank did not include any mandatory or restricted balances
Costs directly attributable to the acquisition have been expensed within operating expenses.
In May 2015, a restructuring of the Skye Group structure was carried out. The effect of this was that the operations ofMainstreet Bank Ltd was integrated into the operations of Skye Bank Plc. Mainstreet Bank Ltd thus ceased to exist from the
date of the integration.
This transaction was deemed to be a reorganisation of an existing Group and thus, the net assets of the Mainstreet Bank Ltd
was combined with Skye Bank Plc's using the book values as at that date. This business combination has been accounted for
as a common control transaction where Skye Bank (the acquirer) has applied predecessor accounting as the basis in
recognising the assets acquired and the liabilities assumed of Mainstreet Bank Limited in the financial statements. Any
difference between the purchase consideration and the net assets acquired has been accounted for in retained earnings.
Liabilities assumed
31 December 31 December
2015 2014
Final Provisional
Fair value Fair value
Deposits and other accounts 128,576 128,576
Due to other financial institutions 39,318 39,318
Borrowings from local and foreign banks/Institutions 6,312 6,312
Accruals and other liabilities 33,016 74,836
Taxation payable 3,891 3,891
Liabilities on investment contracts 26 26
Deferred tax liability 139 139
Liabilities 211,278 253,098
Non controlling interest (note 51a) 138 138
Net assets acquired 135,551 95,865
Purchase consideration 126,575 126,575
(Bargain Purchase)/Goodwill (8,976) 30,710
Cash and cash equivalents acquired from the subsidiary is made up of the following:
Unrestricted balances with central banks 407 407
Cash on hand and balances with banks 14,627 14,627
Money market placements and other cash equivalents 8,394 8,394
23,428 23,428
Purchase consideration (126,575) (126,575)
Net cash effect from acquisition (103,147) (103,147)
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
133
NOTES TO THE FINANCIAL STATEMENTS
Assets acquired
Recognised
book values
Cash and cash equivalents 66,114
Non pledged trading assets 5,319
Assets held under repurchase agreements 9,352
Pledged assets 55,993
Loans and advances 45,628
Investment securities:
- Available for sale investments 4,332
- Held to maturity assets 47,614
Prepayment and other assets 50,213
Investment in subsidiaries 9,674
Intangible assets - software 1,885
Property, plant and equipment 34,497
Assets 330,621
Liabilities assumed
Deposits and other accounts 134,059
Due to other financial institutions 39,318
Borrowings from local and foreign banks/institutions 5,771
Accruals and other liabilities 20,824
Current tax liabilities 2,456
Liabilities 202,428
Non controlling interest (note 51a)
Net assets acquired 128,192
Purchase consideration 126,575
Capital reserve (1,617)
52 Non-audit services
Service Contractual sum Amount Paid
i) Skye Bank loan certification for European International Bank 1 1
ii) Skye Bank recovery plan 34 20
iii) IFRS 9 training and impact assessment 27 -62 21
In line with predecessor accounting requirements, Skye Bank has chosen to incorporate Mainstreet Bank's result as if both
(Skye Bank and Mainstreet Bank) had always been combined. Therefore, as of the beginnining of the year, the net assets of
Mainstreet Bank Ltd was as follows:
During the year, the bank's auditor, PricewaterHouseCoopers, rendered non-audit services to the bank. Below are the
details of the services
In the bank's opinion, the provision of these services to the bank did not impair the independence and objectivity of the
external auditor.
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
134
NOTES TO THE FINANCIAL STATEMENTS
53
(a)
(i)
The
condensed
financia
ldata
ofth
econsolidate
dentities
as
at
31
Decem
ber
2015,are
as
follow
s:
Condensed
sta
tem
ent
ofpro
fit
or
loss
and
oth
er
com
pre
hensiv
ein
com
e
Skye
Ban
k
Sie
rra
Leo
ne
Skye
Ban
k
Gu
inea
Skye
Ban
k
Gam
bia
Skye
Ban
k
Sta
ffS
hare
Sch
em
e
Main
str
eet
Ban
kEsta
te
Co
mp
an
y
Ltd
*
Main
str
eet
In
su
ran
ce
Bro
kers
Co
mp
an
yLtd
Main
str
eet
In
tern
ati
on
al
Fin
an
ce
Main
str
eet
Mic
rofi
nan
ce
Ban
kLtd
Main
str
eet
BD
CLtd
Main
str
eet
Secu
riti
es
Ltd
Main
str
eet
Cap
ital
Mark
ets
Ltd
Main
str
eet
Reg
istr
ar
Ltd
Main
str
eet
Tru
ste
es
an
d
Asset
Man
ag
em
en
t
Co
mp
an
yLtd
Opera
ting
incom
e580
831
299
-124
187
373
495
46
-447
311
1,0
13
Opera
ting
expenses
(417)
(522)
(299)
-(1
21)
(97)
(147)
(336)
(6)
(154)
(77)
(68)
(218)
Net
impairm
ent
on
financia
lassets
(12)
(50)
2-
(5)
--
(7)
--
--
(19)
Pro
fit
befo
reta
x151
259
2-
(2)
90
226
152
40
(154)
370
243
776
Taxation
(61)
-(1
3)
-(1
0)
(28)
(45)
-(1
9)
(26)
(87)
(235)
Pro
fit
for
the
year
90
259
(11)
-(2
)80
198
107
40
(173)
344
156
541
Assets
Cash
and
short
term
funds
565
1,4
17
438
--
--
2-
--
--
Derivative
financia
lassets
--
--
--
178
--
--
--
Due
from
banks
and
oth
er
financia
l
institu
tions
523
351
526
-30
490
314
710
731
1,5
05
2,6
96
4,1
68
Fin
ancia
lassets
held
for
tradin
g-
--
--
--
--
-213
--
Loans
and
advances
tocusto
mers
1,1
59
1,6
14
375
--
--
1,6
06
--
--
-
Investm
ent
securities
2,1
70
2,0
33
1,0
41
1,3
42
-742
2,7
06
29
-1,3
29
2,4
72
-1,7
31
Assets
ple
dged
as
collate
ral
--
--
--
--
--
--
1
Pre
paym
ent
and
oth
er
assets
141
52
430
-31
37
83
28
38
612
55
74
Tra
din
gpro
pert
ies
--
--
2,7
05
--
--
--
--
Investm
ent
pro
pert
ies
--
--
2,0
08
--
--
--
--
Investm
ent
insubsid
iaries
--
--
5-
--
--
--
-
Pro
pert
y,
pla
nt
and
equip
ment
172
120
460
-30
22
814
44
167
130
29
Inta
ngib
leassets
-4
7-
--
--
--
--
-
Defe
rred
tax
assets
212
--
--
-47
27
-52
--
169
4,9
42
5,5
91
3,2
77
1,3
42
4,8
09
80
53
,11
22
,02
07
52
2,1
22
4,3
69
2,8
81
6,1
72
Fin
an
ced
by:
Due
tooth
er
financia
lin
stitu
tions
-906
--
--
-438
--
--
-
Deposits
from
custo
mers
2,8
00
2,0
34
1,8
83
-19
--
397
--
8-
1,8
15
Derivative
financia
lliabilitie
s-
--
--
--
--
--
--
Borr
ow
ings
from
localand
fore
ign
institu
tions
--
-1,4
91
752
--
--
--
--
Taxation
payable
16
-1
-160
35
19
23
37
160
355
187
154
Accru
als
and
oth
er
liabilitie
s521
499
229
-999
222
69
98
453
1,2
24
2,8
54
2,1
87
1,9
20
Defe
rred
tax
liability
--
6-
164
311
-2
--
3-
Retire
ment
benefit
obligation
9-
--
--
--
--
--
4
Equity
1,5
96
2,1
52
1,1
58
(149)
2,7
15
544
3,0
13
1,0
63
260
738
1,1
52
504
2,2
79
4,9
42
5,5
91
3,2
77
1,3
42
4,8
09
80
43
,11
22
,01
97
52
2,1
22
4,3
69
2,8
81
6,1
72
Net
cashflow
from
opera
ting
activitie
s825
2,0
43
42
-(8
3)
(13)
140
(250)
2567
(177)
11,0
13
Net
cashflow
from
investing
activitie
s(7
67)
204
31
-(3
)83
(137)
534
-98
5-
2,6
60
Net
cashflow
from
financin
gactivitie
s-
--
(30)
--
(177)
--
(0)
-(2
70)
Incre
ase/(
Decre
ase)
incash
and
cash
equiv
ale
nts
59
2,2
47
73
-(1
16)
70
3107
2665
(173)
13,4
04
Cash
and
cash
equiv
ale
nt,
begin
nin
g1,0
28
584
-146
678
86
79
701
66
1,6
78
2,6
95
764
Cash
and
cash
equiv
ale
nt,
end
ofyear
1,0
87
2,2
47
657
-30
748
89
186
703
731
1,5
05
2,6
96
4,1
68
Co
nd
en
sed
resu
lts
of
co
nso
lid
ate
den
titi
es
Co
nd
en
sed
sta
tem
en
to
fn
an
cia
lp
ositi
on
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
135
Co
nd
en
se
dre
su
lts
of
the
co
nso
lid
ate
de
nti
tie
sas
at
3 1
De
ce
mb
er
20
14
,are
as
foll
ow
s:
31
Dec
em
be
r2
01
4
Opera
ting
incom
e
Opera
ting
expenses
Impair
ment
Pro
fit
befo
reta
x
Taxation
Pro
fit
aft
er
tax
*M
ain
str
eet
bank
was
acquir
ed
inD
ecem
ber
2014
and
did
not
contr
ibute
toth
eG
roup's
pro
fit
for
the
year.
See
note
51
Ass
ets
Cash
and
short
term
funds
Due
from
banks
and
oth
er
financia
lin
stitu
tions
Fin
ancia
lassets
held
for
tradin
g
Assets
under
repurc
hase
agre
em
ent
Loans
and
advances
tocusto
mers
Investm
ent
securi
ties:
-Available
for
sale
investm
ents
-H
eld
tom
atu
rity
assets
-Loans
and
receiv
able
s
Assets
ple
dged
as
collate
ral
Pre
paym
ent
and
oth
er
assets
Investm
ent
insubsid
iari
es
Inta
ngib
leassets
Pro
pert
y,
pla
nt
and
equip
ment
Defe
rred
tax
assets
Tra
din
gpro
pert
ies
Investm
ent
pro
pert
ies
Assets
cla
ssifi
ed
as
held
for
sale
Tota
lassets
Lia
bil
itie
s
Deposits
and
oth
er
accounts
Due
tooth
er
financia
lin
stitu
tions
Deri
vative
financia
lliabilitie
s
Borr
ow
ings
from
localand
fore
ign
banks/i
nstitu
tions
Accru
als
and
oth
er
liabilitie
s
Taxation
payable
Lia
bilitie
son
investm
ent
contr
acts
Defe
rred
tax
liability
Retire
ment
benefit
obligation
Equity
and
reserv
e
Net
cash
(used
in)/
genera
ted
from
opera
ting
activitie
s
Net
cash
genera
ted
from
/(used
in)
investing
activitie
s
Net
cash
(used
in)/
pro
vid
ed
by
financin
gactivitie
s
Incre
ase/(
Decre
ase)
incash
and
cash
equiv
ale
nts
Effe
ctof
exchange
rate
fluctu
ations
on
cash
held
Cash
and
cash
equiv
ale
nt,
begin
nin
gof
year
Cash
and
cash
equiv
ale
nt,
end
of
year
Skye
Ban
kS
taff
tru
st
sch
em
e
Skye
Ban
k
Gam
bia
Skye
Ban
kS
ierr
a
Leon
e
Skye
Ban
kG
uin
ea
Main
str
eet
Ban
k*
135,4
46
-318
338
640
-
(106,4
75)
-(2
06)
(225)
(370)
-
(19,7
06)
-(5
)(2
7)
(99)
-
9,2
65
-107
86
171
-
(636)
(3)
(28)
(66)
-
8,6
29
-104
58
105
-
251,8
05
-473
494
1,8
01
46,0
71
56,1
14
-271
363
334
15,9
26
1,3
84
--
--
7,5
47
--
--
-9,3
52
598,1
97
-271
812
664
46,4
76
-
2,7
18
1,3
42
--
-2,6
39
72,6
87
-814
1,1
81
1,4
70
68,3
13
18,3
87
--
--
-
34,0
66
--
--
61,9
80
12,6
19
-321
56
59
50,2
31
129,6
07
--
--
-
1,9
62
-11
-12
1,8
86
29,9
37
-246
170
146
15,7
95
--
-199
-264
--
--
-2,7
27
--
--
-1,4
28
150
--
--
-
1,2
09
,63
31
,34
22
,40
73
,27
54
,48
63
30
,63
5
124,9
67
1,4
91
--
-6,3
12
818,4
57
-1,3
14
1,6
82
2,3
04
128,5
76
12,4
98
--
--
39,3
18
288
-
112,2
09
-14
376
422
74,8
36
1,2
78
-1
356
3,8
92
--
--
-26
1,0
84
-2
--
139
6,8
99
--
4-
-
131,9
53
(149)
1,0
76
1,2
10
1,7
04
77,5
37
1,2
09
,63
31
,34
22
,40
73
,27
54
,48
63
30
,63
6
(68,0
14)
-162
(33)
1,5
32
(10,6
70)
(4,9
28)
-(1
99)
(310)
452
9,2
68
(22,9
87)
--
--
(95,9
29)
-(3
7)
(343)
1,9
84
(1,4
02)
2,5
16
--
--
-
202,1
87
-510
1,2
00
721
29,9
11
108,7
74
-473
857
2,7
05
28,5
09
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
136
Value Added Statement
31 December 31 December 31 December 31 December
Group 2015 % 2014 % 2015 % 2014 %
Gross income 163,878 145,718 159,511 135,446
Interest expense (76,993) (44,572) (78,085) (44,495)
86,885 101,146 81,426 90,951
Administrative overheads:
- Local (47,943) (36,518) (45,758) (36,260)
- Foreign (347) (161) (326) (156)
Value added 38,595 100 64,467 100 35,342 100 54,535 100
Distribution
Employees
- Wages & salaries and
other staff cost38,229 99% 19,676 31% 37,122 105% 19,481 36%
Government
- Taxation 1,120 3% 1,377 2% 663 2% 1,278 2%
The future
- Asset replacement (depreciation)
- Local 7,101 18% 3,847 6% 6,930 20% 3,718 7%
- Asset replacement (amortisation)
- Local 1,845 5% 543 1% 1,815 5% 406 1%
- Impairment loss 34,681 90% 20,951 32% 34,957 99% 21,665 40%
- Expansion (transfers to
reserves)
(46,341) -120% 18,717 29% (48,038) -136% 8,629 15%
- Deferred taxation 1,960 5% (644) -1% 1,893 5% (642) -1%
38,595 100% 64,467 100% 35,342 100% 54,535 100%
Group Bank
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
For year ended 31 December 2015
(All amounts in millions of Naira unless otherwise stated)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
137
Fiv
eY
ea
rF
inancia
lS
um
mary
31
Dec.
31
Dec.
31
Dec.
31
Dec.
31
Dec.
31
Dec.
31
Dec.
31
Dec.
31
Dec.
31
Dec.
Assets
:2
01
52
01
42
01
32
01
22
01
12
01
52
01
42
01
32
01
22
01
1
Cash
and
bala
nces
with
centr
albanks
205,1
47
300,6
44
145,0
56
111,6
66
80,6
15
202,7
25
251,8
05
142,6
98
109,9
87
80,3
21
Due
from
banks
and
oth
er
financia
lin
stitu
tions
37,0
31
72,9
78
149,3
24
96,6
71
90,1
83
35,6
17
56,1
14
148,2
68
95,8
74
87,1
85
Fin
ancia
lassets
held
for
tradin
g344
18,2
83
617
2,2
64
64
131
1,3
84
617
2,2
64
64
Derivative
financia
lassets
178
--
16,2
75
--
--
16,2
75
-
Loans
and
advances
tocusto
mers
704,8
96
645,7
74
549,8
58
540,3
80
486,9
05
700,4
03
598,1
97
551,3
28
540,0
36
489,2
51
-Available
for
sale
investm
ents
14,8
75
8,4
14
3,7
09
6,4
34
8,7
53
9,8
12
2,7
18
3,7
09
6,4
34
8,0
45
-H
eld
tom
atu
rity
investm
ents
50,7
56
125,1
01
154,7
49
180,8
04
148,5
56
43,0
31
72,6
87
151,6
26
178,1
91
147,2
26
-Loans
and
receiv
able
sin
vestm
ents
34,9
49
36,0
58
34,7
34
25,5
35
14,8
66
33,9
19
18,3
87
34,7
34
25,5
35
15,1
53
Assets
ple
dged
as
collate
ral
68,7
01
90,1
70
30,6
35
36,8
88
68,7
01
34,0
66
30,6
35
36,8
88
Pre
paym
ent
and
oth
er
assets
9,9
73
15,0
69
15,1
32
24,1
53
8,6
32
15,4
43
12,6
19
15,1
50
25,1
59
9,1
41
Tra
din
gpro
pert
ies
3,8
59
3,8
66
--
--
Investm
ent
pro
pert
ies
2,0
08
1,9
95
--
1,8
42
--
--
-
Investm
ent
insubsid
iaries
--
--
-6,6
93
129,6
07
2,9
80
2,9
80
7,2
74
Investm
ent
inassocia
tes
--
-30
2,1
33
--
-30
1,7
90
Pro
pert
y,
pla
nt
and
equip
ment
62,9
73
65,4
31
29,5
23
29,7
33
31,1
07
61,8
13
29,9
37
29,1
06
28,7
93
29,9
48
Inta
ngib
leassets
3,0
76
3,8
71
3,0
83
1,3
68
806
3,0
66
1,9
62
2,9
42
1,2
38
1,1
29
Defe
rred
tax
assets
481
463
--
81
--
--
-
Assets
cla
ssifi
ed
as
held
for
sale
150
150
217
1,6
27
39,7
22
150
150
217
1,6
27
-
TO
TA
LA
SS
ETS
1,1
99
,39
71
,38
8,2
67
1,1
16
,63
71
,07
3,8
28
91
4,2
65
1,1
81
,50
41
,20
9,6
33
1,1
14
,01
01
,07
1,3
11
87
6,5
27
Lia
bil
itie
s
Due
tooth
er
financia
lin
stitu
tions
33,1
10
51,8
16
143
2,5
06
15,6
50
31,7
66
12,4
98
143
2,6
29
15,6
50
Deposits
from
custo
mers
753,1
45
952,3
02
823,3
25
790,0
92
645,4
49
754,8
82
818,4
57
819,7
36
786,9
60
645,7
46
Derivative
financia
lliabilitie
s335
288
249
16,5
88
-335
288
249
16,5
88
-
Borr
ow
ings
from
localand
fore
ign
institu
tions
216,4
48
131,2
79
136,6
85
114,2
08
85,2
48
216,4
48
124,9
67
136,6
85
114,2
08
85,2
48
Curr
ent
tax
liability
2,7
16
5,2
30
1,0
58
1,1
67
984
1,5
15
1,2
78
1,0
41
1,0
03
818
Accru
als
and
oth
er
liabilitie
s78,5
88
97,9
66
24,6
63
36,3
69
29,3
68
74,1
41
112,2
09
24,4
15
35,7
38
28,8
25
Defe
rred
tax
liability
3,3
67
1,2
25
1,5
35
1,4
01
-3,1
77
1,0
84
1,7
26
1,4
95
38
Lia
bilitie
son
investm
ent
contr
acts
-26
--
--
--
--
Retire
ment
benefit
obligation
7,5
05
6,9
03
7,5
78
7,2
17
971
7,4
91
6,8
99
7,5
78
7,2
16
920
--
--
36,4
89
--
--
-
TO
TA
LLIA
BILITIES
1,0
95
,21
41
,24
7,0
35
99
5,2
36
96
9,5
48
81
4,1
59
1,0
89
,75
51
,07
7,6
80
99
1,5
73
96
5,8
37
77
7,2
45
Eq
uit
y
Share
capital
6,9
40
6,6
09
6,6
09
6,6
09
6,6
09
6,9
40
6,6
09
6,6
09
6,6
09
6,6
09
Share
pre
miu
m65,5
48
65,5
48
65,5
48
65,5
48
65,5
48
65,5
48
65,5
48
65,5
48
65,5
48
65,5
48
Reta
ined
earn
ings
and
oth
er
reserv
es
30,7
68
68,3
11
48,3
96
31,2
85
25,1
45
19,2
61
59,7
96
50,2
80
33,3
17
27,1
25
10
3,2
56
14
0,4
68
12
0,5
53
10
3,4
42
97
,30
29
1,7
49
13
1,9
53
12
2,4
37
10
5,4
74
99
,28
2
Non-c
ontr
ollin
gin
tere
st
927
764
848
838
2,8
04
--
--
-
TO
TA
LEQ
UITY
10
4,1
83
14
1,2
32
12
1,4
01
10
4,2
80
10
0,1
06
91
,74
91
31
,95
31
22
,43
71
05
,47
49
9,2
82
TO
TA
LLIA
BILITIES
AN
DEQ
UITY
1,1
99
,39
71
,38
8,2
67
1,1
16
,63
71
,07
3,8
28
91
4,2
65
1,1
81
,50
41
,20
9,6
33
1,1
14
,01
01
,07
1,3
11
87
6,5
27
Co
nti
ng
en
tliab
ilit
ies
10
6,6
91
82
,67
41
23
,28
21
56
,93
01
41
,99
01
06
,63
27
7,2
72
12
3,2
82
15
6,9
30
14
1,9
90
Gro
up
Ban
k
Lia
bilitie
sheld
for
sale
CO
NS
OL
IDA
TE
DA
ND
SE
PA
RA
TE
FIN
AN
CIA
LS
TA
TE
ME
NT
S
Fo
ry
ea
re
nd
ed
31
De
ce
mb
er
20
15
(All
am
ounts
inm
illions
ofN
aira
unle
ss
oth
erw
ise
sta
ted)
S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5
138