1

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Investor and Analyst PresentationFY Ended Dec 09 & Q1 Mar10 Results

May 06, 2010

2

Skye Bank Overview

December 2009 & March 2010 Results & Performance Highlights

2010 Financial Year Outlook

Appendices

Outline:

3

4-11

12-13

14-43

Page

3

Skye Bank is strong in key financial centers of NigeriaSkye Bank is strong in key

financial centers of Nigeria

Strong presence in Abuja- National Capital; Lagos- the Commercial nerve centre; and Rivers- the Oil & Gas Capital

Efficiency in Transaction Processing & IGR

Efficiency in Transaction Processing & IGR

Top 5 in payment transactions & top 4 IGR Collecting Bank (10% industry total) Top 4 in ATM & POS businesses New Mandates (Sep 2009-March 2010): 1. Lead Bank IGR- Bauchi, Yobe & Taraba; Collecting Bank IGR in Katsina & Gombe;

Autoreg: Borno, Kebbi, Taraba & Sokoto 2. E-IGR for various local governments 3. Won the ‘Most Efficient ATM Network’ Award by Interswitch in 2009

Top 5 Industry PositionTop 5 Industry Position Ranks 5th in industry by Book Value & Assets (N622 billion)

Independent of any Controlling Interest

Independent of any Controlling Interest

Well diversified shareholder base No single shareholder accounts for more than 5%

WHO WE ARE/KEY STRENGTHS

Focus on EfficiencyFocus on Efficiency Headcount/Staff cost reduction Continuous scale-down of operations in certain locations

4

PERFORMANCE HIGHLIGHTS – FY09 Vs FY08 (BANK)

P&L

Balance Sheet

Other Key Ratios

The Efficiency Focus

N127 bn Gross Earnings (from N75 bn)

N47 bn Net Interest Income (from N30 bn)

Positive PAT (despite additional provision )

Total Assets of N622 bn (declined by 21%)72% Loan to Deposit Ratio (LDR)40% Liquidity Ratio (regulatory minimum is 25%)

ROE 1.28%ROA 0.18%Capital Adequacy at 17% (regulatory minimum is 10%)

Successful recovery efforts for write-back of loans Net placer of funds in inter-bank marketIndustry leader in ATM & POS transactions

+70% +55%

These figures reflect 15month period ended Dec 2009

5

Stronger and more Resilient Financial

Institution

Increased number of Financial Products

and Channels

Superior Service Quality

Stable Liquidity and Asset quality: Loans and advances increased by 30% (N251bn to N327bn) Long term borrowings reduced by 94% (FY 08: N37.5 bn) Capital Adequacy ratio above regulatory minimum at 17% Marginal decline of 7% in Group Shareholders’ Fund

Profitability: Steady growth in Gross Earnings (annual growth rate of 37%) Recovery efforts now paying off (over N10 bn recovered

within 4Q09, expect to recover additional N14bn in FY10) Group Interest income increased by 85% (from N54bn to

N100bn) Group PBT declined from N22bn to N845 mn (subsequent to

N32 bn additional provisioning during the year)

Sustainable earning strength supported by…. Earnings growth through robust ICT payment platform (IGR &

other revenue collection mandate, Industry leader in automated transactions)

Efficient use of resources for optimized returns Integrated financial services model (Financial Advisory,

Mortgage, Asset Management, Trusteeship)

Performance highlights... (Cont’d)

6

Parameters FY 09 FY 08 YoY

(N’million) (N’million) % Change Gross Earnings 131,521 76,605 72%Provisions -34,847 -4,113 747%PBT 845 21,690 -96%PAT 9 15,826 -99%Assets 632,511 790,708 -20%Deposits 455,990 520,472 -12%

Loans & Advances 327,190 251,430 30%Shareholders’ Funds 90,430 96,789 -7%ROE 0.010% 16.12%

ROA 0.001% 1.93%

Interest Income Margin 48.041% 55.64%

GROUP FINANCIAL SUMMARY:

7

FINANCIAL SUMMARY (Cont’d)

Parameters FY 09 Actual Annualized

FY 09 FY 08 YoY (N’million) (N’million) % Change Gross Earnings 131,521 105,217 76,605 37%PBT 845 676 21,690 -97%Provisions -34,847 -27,878 -4,113 578%PAT 9 7 15,826 -100%

Parameters FY 09 ActualAnnualized

FY 09 FY 08 YoY (N’million) (N’million) % Change Gross Earnings 126,665 101,332 74,615 36%PBT 2,148 1,718 20,425 -92%Provisions -31,337 -25,070 -3,981 530%PAT 1,130 904 15,126 -94%

Annualized Group Data

Annualized Bank Data

8

PERFORMANCE HIGHLIGHTS (Cont’d)

March 2010 compared to December 2009

The Efficiency Focus

Gross Earnings of N24billion Over 30% growth in PBT (from N2.1 billion to N2.8 billion)Deposits of N500 billion, over 9% growth from N458 billionPositive (5%) growth in Total Assets, from N622 billion to

N654 billion Capital Adequacy ratio of 17%

March 2010 compared to March 2009

Total Asset grew by 40% (from N467 billion to N654 billion) Loans & Advances of N323 billion from N209 billion

(recorded growth of 55% despite challenging economic conditions)

72% growth in Deposits (up from N290 billion to N500 billion)

Gross Earnings of N24 billion

9

Parameters Jan-Mar ‘10 Oct-Dec ‘09 (N’million) (N’million) % Change Gross Earnings 23,768 25,217 -6%PBT 2,804 14,782 -81%Provisions -600 -31,337 98%PAT 2,243 11,825 -81%Assets 653,874 622,164 5%Deposits 499,859 452,981 10%Loans & Advances 323,351 328,184 -2%

Shareholders’ Funds 88,032 88,032 0%ROE 2.55% 1.28%ROA 0.34% 0.18%Interest Income Margin 42.38% 37.18%Capital Adequacy 16.96% 16.83%Avg Cost of Fund 2.25% 9.44%

FINANCIALS – Q110 Vs Q109 (Bank)

Leveraging core competences in ICT platforms for sustainable business growth

Earnings declined 6% from N25 billion to N24 billion

Deposits grew by 10%, thus enabling balance sheet expansion for profitability and growth

We expect to see sustainable growth to 2010 year-end

PERFORMANCE REVIEW

Reduction in top-line Earnings as a result of a decrease in fees and commissions on new loans & advances and impact of severance benefits to laid-off staff

10

(N’billion) (N’billion)

Total Provisions to Sep 2009

51.7Analysis of Initial Provisions -Risk Assets 17.2 -Others 2.3Total Initial Provisions 19.4Analysis of Additional Provisions (Post CBN/NDIC Exam) -Capital Market 13.0 -Oil & Gas 1.8 -Real Estate 7.0 -Manufacturing 2.7 -Others 7.7Total Additional Provisions 32.3

Provisioning Result of the 2009 National Audit..

11

Classification of Loans Recovered

CLASSIFICATION AMOUNT (N’BILLION) SUB STANDARD 2.08DOUBTFUL 2.69LOST 5.19TOTAL 9.96

S/N INDUSTRY TOTAL (N’bn)1 Manufacturing 2.382 General Commerce 1.553 Oil & Gas 1.084 Hospitality 0.885 Oil & Gas 0.726 Hospitality 0.507 Construction 0.418 Maritime 0.419 Oil & Gas 0.41

10 Real Estate 0.35 Total 8.69

Top 10 Recoveries

Post August 09 National Audit…

About N10 billion recovered between Sep 09 & Dec 09

Huge opportunity for earnings growth in 2010 as a result of write-backs

Reinvigorated recovery efforts paying-off

CLASSIFICATION AMOUNT (N’MILLION) PERFORMING 286, 332SUB STANDARD 22, 436DOUBTFUL 22, 775LOST 23, 889TOTAL 355,432

*Included in the NPL is a sum of N22 billion marked to market

Total Non Performing Loan of N69.1 billion in FY09 NPL ratio of 19%

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Recoveries… Expected Recovery of N14 billion to

December 2010

Mostly contributed by Substandard Loans

Therefore, net effect would not be significant on Profit (likely between N3.5 billion to N4 billion)

Expectations For 2010

New Developments…

Interest Income Margin…

Asset Growth & Capitalization

FY 09 at 48.04%

Seeking to return to FY 08 levels between 55%-60%

Efficient repricing of Risk Assets & Deposit Liabilities

Received N5.6 billion under CBN’s Commercial Agriculture Credit Scheme at 0% interest for a 7year tenor (for on-lending at 9%)

Current strategy targeting loan growth of 20%

Current level of capitalization of 17% CAR (for the Bank) sufficient for current loan growth target and current statutory minimum

Management seeks shareholders’ approval for the flexibility to raise additional Equity or Tier 2 Capital

Profit Outlook… Return to at least FY08 profitability levels

Medium-term ROE target of 20%

13

CLASSIFICATION AMOUNT (N’MILLION) Total NPL 69,100Marked to Market (21,575)Net NPL 47,525Expected Recoveries (14,000)Expected NPL 33,525

CLASSIFICATION AMOUNT (N’MILLION)

Expected NPL 33,525

Expected Gross Loans (20% increase) 426, 518

Expected NPL Ratio to December 2010 7.86%

NPL Expectation to FY ’10…

NPL Ratio to FY ’10

14

Business Focus & Footprints

Integrated Model

Risk Management Framework

Financials

Strategic Outlook

Outline of Appendices:

15

BUSINESS FOCUS & FOOTPRINTS…..

TransportationTransportation

Transformed road transportation in the Nigeria’s Oil Capital- Port Harcourt Financed the largest Cab & Bus services in Lagos State Major financier of Lagos Government/Mass Transport Scheme Lead Financier/Facility Arranger for Port Harcourt Monorail System – valued at

Euro 326 million

PowerPower Lead Financier & Arranger for two Independent Power Projects (IPP) in South

Western Nigeria – combined value $500 million Provided Financial & Advisory services on the 110MW power project in North

Eastern Nigeria

Construction, Hospitality & Infrastructure

Construction, Hospitality & Infrastructure

Financed a major Ultra Modern Hotel in Rivers State (South-South) Financier of the largest Hotel in Lagos (planned commencement in Dec 2010) Financier of several Residential Housing Estates in Lagos, Abuja and Port

Harcourt ($1.5 billion since 2000) Wholly funded one of the best private schools in Lagos StatePr

ojec

t Fin

ance

Proj

ect F

inan

ce

AgricultureAgriculture

Revitalization/Funding of West Africa’s leading Cocoa Factory- Multitrex Lead Financier of the Federal Ministry of Agriculture’s “Rice Plantation &

Settlement Scheme” – South West and Northern Nigeria Received N5.6 billion under CBN’s Commercial Agriculture Credit Scheme at

0% interest for a 7year tenor (for on-lending at 9%)

16

BUSINESS FOCUS & FOOTPRINTS….. (Cont’d)

Oil & Gas- UpstreamOil & Gas- Upstream

Major contributor in $254million syndicated funding for exploration & production (EP) development of an OPL under PSC agreement with NNPC and

70km 20” & 35km 10” liquid hydrocarbon transportation pipeline (in 2009) Wholly financed engineering, procurement , construction, and installation of

2000mm SCF Gas processing Plant in 2009 Major financier of 4 out of 6 major producing & performing marginal oil

fields in Nigeria

Oil & Gas- Downstream

Oil & Gas- Downstream

Financier of one of the largest facilities in the industry- a $25million 66,000MT capacity tank farm

Major banker to several high-end international suppliers of refined petroleum products

Financed acquisition of several Liquefied Gas Plants and vessels in excess of $25m

Maritime/ShippingMaritime/Shipping

Financed the acquisition of first-ever Nigerian flagged vessel to sail from the US to Nigeria

Financed various vessel acquisitions in excess of $200million Financed the acquisition and upgrade of the biggest clearing and forwarding

company in West Africa Appointed advising bank to the $20million Maritime Finance Fund to increase

Nigeria’s Flag Fleet Won the Nigerian Maritime Bank Award for 2 consecutive years- 2007&2008

Proj

ect F

inan

cePr

ojec

t Fin

ance

17

SKYE GROUP

Skye Financial Services

Skye Mortgages Skye Trustees Skye Bank SierraLeone

Skye BankGambia

Fully integrated financial services model – Investment Banking/Advisory Services, Trusteeship, Real Estate, Insurance etc

Providing diversified offerings across geographies and customer segments

Skye Bank Plc

Law Union & Rock(Insurance)

Skye Bank Guinea

INTEGRATED MODEL:

18

EVOLVING MODEL: AVAILABLE OPTIONS FOR NEW OPERATING MODEL

18

SKYE BANK REMAINS AS PURE COMMERCIALBANK ONLY • Skye Bank legal ownership identity remains unchanged • All non-core banking services (not contemplated by the CBN licensing guidelines) are exited • No need for a new HoldCo

CONVERT SKYE BANK PLC INTO A FINANCIALSERVICES HOLDING COMPANY• A ‘new’ pure banking entity emerges as a subsidiary of Skye HoldCo• Consider the propriety (or otherwise) of keeping certain subsidiaries and exit some

INCORPORATE A NEW FINANCIAL SERVICES HOLDCO TO OWN SKYE BANK PLC AND ITS SUBSIDIARIES• A new HoldCo is founded to buy majority or all of Skye Bank Plc shares in exchange for ownership of HoldCo shares • Skye Bank Plc becomes a pure commercial bank• The HoldCo owns existing subsidiaries (barring divestiture in certain subsidiaries)

21

3

19

LIKELY MODEL:

SkyeHolding Company

Skye Bank Plc

Subsidiary B

Subsidiary C

Subsidiary A Business impact assessment of ALL

Subsidiaries would be conducted to determine areas of divestiture

Conversion of Skye Bank Plc into a Financial Services HoldCo

Consequently…

20

OPERATING MODEL:

Focus on long-term value proposition in business relationships in defined sectors

Offer integrated financial solution & execution expertise

Provide single unique value proposition to different market segment/cluster

Enhance clients’ businesses through profitable business relationships

Strategy

Market analysis and focused business planning

Performance analysis and reporting

Continuous bank-wide customer service training

Adherence to sound corporate governance practices

Processes

Competent team of banking & finance professionals

Strong ICT platform for business operations and service

Centralized business processes to support lean/efficient operation

Code of business ethics and

Consistent resource audit and optimization

Resources

Experienced management team with seamless succession plan

Operate regional marketing model – Ibadan, Abuja, Kano & P/Harcourt.

Maintains specialist subsidiaries as a fully integrated financial service provider- Stockbroking, Trusteeship, Insurance, Mortgage

Guide and cautious regional expansion- Presence in the West Africa Sub-region- Sierra Leone, The Gambia & Guinea

Structure

21

Head, Enterprise Risk Mgmt

Existing Customer

Mgmt

Asset Review & Monitoring (Loan

Recovery)

Quality Assurance

(Originations) - Corporate

Loan review and Credit Monitoring (Corporate)

Head, Market/Liquidity Risk Mgmt

Head, Operational Risk MgmtHead, Credit Risk Mgmt

Retail Risk

AR&M Region 4

MIS/Policy Origination/CPV

Collections/Recovery

• Team 1• Team 2• Team 3• Team 4

Internal Control &

Compliance

Credit Admin

Loan Review

AR&M Region 1 AR&M Region 2 AR&M Region 3 AR&M Region 5

Biz/Support Unit

Internal Audit

•South West•Abuja•South South•North•Ikeja•Lagos Mainland•South East

Portfolio Mgmt Policy Team

Credit Admin(Corp)

Risk Management Framework

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Risk Management (Cont’d)

Major Achievements Complete automation of Loan Origination Process (LOP)

in compliance with Basel Accord Integration of the Lending Process with ‘Rating Engine’ Well experienced manpower to manage all major Risk

areas Signed up to 3 Credit Bureaus (2 have commenced

operations)

23

Loan Portfolio

80%

6%6%7%

Performing

Substandard

Doubtful

Lost

1% 6%18%

12%16%

3%4%

16%

3%

20%

Agriculture

Government

Retail or Consumer

Manufacturing

Financial institutions

Transport & communication

Oil & Gas

Real estate & construction

Other

General commerce

Stable asset qualityConservative approach to lendingDiversified loan portfolioNo concentration risk

Loan Portfolio by Sector (%) Loan Classification

24

Sect

or

Top 10 Industry Loans as % of Gross Loans

Top 10 loans is about N75 billion (21%) of N355 billion Gross Loans

Loan Portfolio (Cont’d)

Oil & Gas Upstream

Consulting

Education

Hospitality

Telecomunication

Maritime

General Commerce

Transportation/Logistics

Agro-Allied

Oil & Gas Upstream

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%

25

11%8% 3

%

35%6%

33%

3%

Term Loan- Individual

Skye Salary Loan

Education Loan

Retail Advances

Lifestyle Loan

Overdraft

Credit Card Loan

Personal Loan

Auto Loan

56%

13%

11%

2%18%

COMMERCIAL

LARGE COR-PORATE

OTHERS

CONSUMER

SMES

Loan Portfolio (Cont’d)

Share of Retail Loan Loan by Customer Type

Efficient and diversified loan portfolioDeployment of best-in-class Retail Banking frameworkSustainable liquidity levelsCapital Adequacy Ratio (CAR) at 17%

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Financial Year End - Now 31st December …

In compliance with the CBN’s uniform accounting year end, Skye Bank has changed its accounting year-end from 30 September to 31 December. Consequently, the FY09 financial statements have been prepared for 15 months period, covering October 2008 to December 2009….

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Parameters FY 09 FY 08 YoY 12M09 9M09 QoQ

(N’million) (N’million) % Change (N’million) (N’million) % ChangeGross Earnings 126,665 74,615 70% 101,448 76,845 32%PBT 2,148 20,425 -89% -12,634 17,050 -174%Provisions -31,337 -3,981 687% -32,178 -4,400 631%PAT 1,130 15,126 -93% -13,264 11,935 -211%Assets 622,164 784,878 21% 581,868 546,035 7%Deposits 452,918 501,594 10% 429,697 383,487 12%

Loans & Advances 328,184 251,211 31% 281,423 285,978 -2%Shareholders’ Funds 88,032 93,853 -6% 86,902 86,902 0%ROE 1.28% 16.12% -15.26% 13.73%

ROA 0.18% 1.93% -2.28% 2.19%Interest Income Margin 37.18% 41.29% 47.17% 47.78%

FINANCIALS : 15 Months Performance Highlights (Bank) 15 Months to December 2009

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Parameters Q110 FY 09 12M09 9M09 6M09 3M09 (N’million) (N’million) (N’million) (N’million) (N’million) (N’million)Gross Earnings 23,768 126,665 101,448 76,845 51,666 27,890PBT 2,804 2,148 19,545 17,050 13,733 8,380Provisions -600 -31,337 -32,178 -4,400 1,800 -500PAT 2,243 1,130 -13,264 11,935 9,613 6,704Assets 653,874 622,164 581,868 546,035 466,676 501,133Deposits 499,859 458,368 429,697 383,487 290,240 320,681Loans & Advances 323,351 328,184 281,423 285,978 208,696 230,289Shareholders’ Funds 88,032 88,032 86,902 86,902 86,802 78,416ROE 2.55% 1.28% -15.26% 13.73% 11.06% 8.55%ROA 0.34% 0.18% -2.28% 2.19% 2.06% 1.34%Interest Income Margin 42.38% 37.18% 47.17% 47.78% 50.79% 52.98%Capital Adequacy 16.96% 16.83% 16% 18.99% 21.74% 18.52%Avg Cost of Fund 2.25% 11.3% 9.4% 8.3% 6.4% 3.1%

FINANCIALS – Q1 2009 to Q1 2010 (Bank)

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Positioning for the upturn

EnhancedRisk Profile

Liquidity Growth

Positioning &Cost Containment

Recoveries & Capital/Debt Raising

Stringent credit process Defined sector focus- Oil

& Gas, Real Estate etc Strong Capital Adequacy

ratio Well diversified loan

portfolio

Controlled asset growth

Leveraging branch network for enhanced deposit growth

Growth in market share

Engaged Consultants in developing market Strategic Positioning

Staff realignment & rationalization

Change in remuneration policy

Realignment of job responsibilities

Reinvigorated recovery effort

Exploiting market opportunity (leveraging flight to safety)

Lengthen maturity profile of liabilities

STRATEGIC OUTLOOK: Navigating the downturn …

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e-Payment Solutions

Revenue (IGR) Collections Payment Administration

•Revenue collection mandate in 27 States (including Lagos & Rivers, accounting for 70% of national IGR)• Implementing collection mandate in the remaining 9 States; 3 years exclusive collection in Rivers State (over 30% of national IGR) • Major collecting Bank for Lagos State government• Top collecting bank in 7 States

Top 3 in industry for e-payment solutions

• Top 5 in industry for ATM & POS• Major Federal Government Retirees

Pension paying bank• Top 5 in industry for Import Duty

collections (6% of industry total)• Top 3 in industry for FIRS collections (8%

industry total)

Market Position – Very difficult to replicate….

31

• Top bankers to Lagos State government (33% of business offices in Lagos)

• Strong branch network in Abuja (for deposit growth)

• Top bankers to the Rivers State government- Oil producing area of the Niger Delta

Strong in Key Financial Centers of Nigeria

Now leaner & more efficient

Development & Construction of Data Centre for a State government’s Board of Internal Revenue

Deployed customized automated Personnel & Payroll Management System and Finger Identification Systems (AFIS) to selected States in Nigeria

Training & Capacity enhancement of 3 State governments’ automated IGR platform

E-IGR deployment for various Local governments AutoReg mandates in 5 major States

Irresistible Value Proposition

Market Position (Cont’d)

32

ReputationReputation

ChannelsChannels

Resource/ AssetsResource/ Assets

Market powerMarket power

CapabilitiesCapabilities

Integrated ModelIntegrated Model

CultureCulture Sector FocusSector Focus

ICTICT

Competitive Strength

-Acquisitions

-Diversified Offerings & Value

for New markets

-Vertically Integrated Structure

-Innovative Products

Presenting opportunitiesfor…

COMPETITIVE LEVER:

33

Equity Market

Nigeria Stock Exchange (NSE) closed at N685.72 billion in December 09, down from the N2.4 trillion recorded in December 2008.

Quick rebound impeded by:- Global recession- Reforms in the banking sector- Decline in Oil prices to $50 pb,

from $147 pb as at July 2008

Average industry PBT growth rate of 141% in June 2008 and CAR of 25.3% now less than 30% & 17% respectively.

Asset Management Company (AMC)

Law making process to establish the AMC is at advanced stage

Aggregate toxic assets between N1.5 trillion to N2 trillion

CBN: Dictating the pace…. Maximum of two 5-year tenure limits

for bank CEOs Stoppage of cheque issuance for

transactions above N10 million

Nigeria Market EnvironmentOthers…

34

Stimulating Credit Growth

Progressing the establishment of AMCON to take up over N1.5 trillion toxic assets towards recapitalizing banks

Sustaining guarantee on interbank lending MPR maintained at 6% Banks to submit their ‘Risk-Based Interest Rate Pricing Model’ to the CBN on

a monthly basis Revising guidelines for loan loss provisioning for preferred sectors

Infrastructure Financing

N200 billion SMEs Credit Guarantee Scheme (SMECGS) set up to encourage SME financing

To setup an Infrastructure Finance Policy and Development Strategy (IFPDS) and Diaspora Mobilization Initiative (DMI) in 2010/2011, to improve infrastructure development financing

Proposing to establish an Asset Purchase Facility (APF) to purchase Federal Government Treasury Securities/Bonds and other high-quality private sector instruments

Revision of the Universal Banking Model Categorization of banks into International, National and Regional banks with

minimum capital base of N100 billion, N50 billion and N25 billion respectively Stoppage of cheque issuance for transactions above N10 million

Remodeling Banking Landscape

Policy Direction of the CBN – Implications for system

35

2009 Q1 2009 Q2 2009 Q3 2009 Q439

39.5

40

40.5

41

41.5

42

42.5

43

43.5

44

43.9

40.9

43.34

42.47

Market Environment (Cont’d)

2009 Q1 2009 Q2 2009 Q3 2009 Q49.00%

9.50%

10.00%

10.50%

11.00%

11.50%

12.00%

12.50%

11.20% 11.10%

10.40%

12.40%

Foreign Reserve ($’bn) Inflation

Average Oil price per Qtr ($ pb)

2009 Q1 2009 Q2 2009 Q3 2009 Q40

10

20

30

40

50

60

70

80

46.65

69.8975.8

66.33

Govt. revenue in Q2 was N1.044trn, 21% lower than Q1 and 11.6% below estimate

Non oil receipts also fell by 36% because of the fall in VAT and company income tax

Total expenditure in Q3 was N901bn, an increase of 11% due to capital releases

Foreign reserve now witnessing incremental growth following increase in crude oil prices

Potential for sustainable liquidity and forex regime

$ pb

$’bn

36

Economic downturn..

•GDP declined from 6.1% in 2008 to 3.20% in Dec 2009 •Marginal increase in contribution of oil & gas (from -1.72% to 0.57%)•Increase in non-oil contribution ratio•International Monetary Fund estimates GDP at 5% and 5.2% in 2010 and 2011 respectively

Nigeria Banking Sector slowed by…..

The recent CBN intervention has led to structural changes in the industry dynamics

Premised on an attractive industry in the long run despite temporary setback

National Audit has cleared 14 out of 24 banks

Injection of N620 billion into ailing /undercapitalized banks by the CBN

Significant impairment of banks’ assets

Scarcity of funds to the productive sectors of the economy (reduced funding from 84% to 32%)

Strategy re-evaluation and alignment with market realities

National Audit: a positive development for Nigerian banks…

Improved level of Transparency and Corporate Governance

Risk Management framework has been enhanced

Ownership structure of Nigerian banks has deviated from conventional practiceCulture of impunity being addressedForex volatility has been

significantly curbed

Navigating economic challenges: Implications of Regulatory Intervention

Most significant unintended consequence is the downside risk to economic recovery and growth

Capital erosion and need for additional capital raising is imperative for banks

Liquidity problem and reduced business confidence

Delayed recovery of the capital market

Significant diminution in share prices of banks

Policy contradictions and political risks

Credits to the private sector in 2009 increased by only 3.75% from N8trn to N8.3trnCyclical effect of the credit squeeze negatively impacted fiscal measures

Market Environment (Cont’d)

37

Nigeria Economic Outlook

New Horizon….

An expected recovery to 5% growth in 2010 This will be propelled by an increase in oil production

as the amnesty programme in the Niger Delta allows for higher output levels

The recent recovery in oil price to over $75/barrel should provide a boost to the Nigerian economy in 2010

Economic growth to be driven primarily by…

Performance of the non-oil sector e.g. Agriculture Stable rise in Oil Prices Sustained increase in Oil & Gas output Sustained peace in the Niger-Delta Favourable policies to stimulate business confidence

But impact of financial crisis might cause some form of slowdown. Hence, outlook for the Nigerian economy is mixed

Nigeria Banking Sector Outlook...

Medium to long term implications are positive with more transparent and more credible domestic financial sector

The quest for size is over– focus on efficiency Better informed banking public Lower interest rates Industry Risk Acceptance Criteria and Risk Management standards will become tighter Another round of M&As expected Increased foreign competition due to attractiveness of industry

to foreign players

The following strategic options are open to Industry regulators and market players

38

Adoption of Macro-Economic

Policies

Adoption of Macro-Economic

Policies

Introduction of monetary policy stabilization programmes and fiscal stimuli to restore confidence in the economy.

Isolation of toxic assets nestling in the banks’ balance sheets and parking them in a special purpose vehicle to be called “bad bank” or “bad fund” which would be treated as a long-term facility for both liquidity and accounting purposes.

Surgical Intervention/Piec

emeal Remediation

Surgical Intervention/Piec

emeal Remediation

Injection of liquidity into the banking system via government funded soft loans and recapitalization

Strengthening of capabilities and competencies via appropriate regulatory policies & increased supervision

Regulatory induced consolidation – encouraging the big/strong to acquire the weak/anaemic

Liquidation of weak and anemic banks to avoid contagion effect on total industry

Introduction of Innovative Measures

Introduction of Innovative Measures

Articulation of self-emancipation strategies to battle negative consequences of the current global economic meltdown

Incremental, radical, and revolutionary changes in thinking, products, processes and service delivery to customers.

Increased value to both the customer and the shareholders to boost investor confidence

Increased productivity and focus on core competencies, which should drive additional inflow of wealth into the economy .

Indu

stry

Reg

ulat

ors

Indu

stry

Reg

ulat

ors

Mar

ket P

laye

rsM

arke

t Pla

yers

Resilient business growth

Improved business

practices & corporate governanc

e framework

Diversified

business lines &

revenue streams

Reinvigorated Risk

Management

practices

For sustaina

ble profitability and growth

Skye Bank: Forging ahead…

39

NAME TOTAL HOLDING % BUSINESS OPERATIONS

BUSINESS OBJECTS LIMITED 509,999,998.00 4.40% Finance and Investment Company

IBILE HOLDINGS LTD. 436,294,000.00 3.77% Property, Finance and Investment Company

STALLION GROUP HOLDINGS (BVI) LIMITED 288,407,332.00 2.49% General Merchandise and Importers

SKYE BANK STAFF SHARES TRUST 361,808,662.00 3.13% Staff Trust

SWANLUX GLOBAL INVESTMENTS LIMITED 190,939,998.00 1.65% Finance and Investment Company

LASG STAFF PENSION 155,811,999.00 1.34% Pension Fund Managers

ALPHA PROPERTY DEVELOPMENT LTD 150,000,000.00 1.29% Property Development Company

GOLDEN ACRES LIMITED 150,000,000.00 1.29% Farming and General Merchandise

CO-OPERATIVE INVESTMENT & TRUST SOC. LTD 139,023,649.00 1.20% Investment and Finance Company

FADCO INVS. LIMITED 137,499,999.00 1.19% Investment and Finance Company

Skye Bank: Major Shareholders

40

1% 9%

13%

10%

39%

29%

Percentage Holdings

1-1,000

1,001-10,000

10,001-100,000

100,001 – 1,000,000

1,000,001-100,000,000

100,000,001-1,000,000,000

39%

49%

11%1% 0% 0%

Distribution of Shareholders

1-1,000

1,001-10,000

10,001-100,000

100,001 – 1,000,000

1,000,001-100,000,000

100,000,001-1,000,000,000

Skye Bank is a publicly

quoted company with

481,272 shareholders,

none owning more than

5% of total capital.

OWNERSHIP STRUCTURE

41

Shares Held By Board Members (about 9% of total outstanding shares)

S/N NAME STATUS DIRECT HOLDING INDIRECT HOLDING 1 Alhaji M.A.K. Smith Chairman 1,602,492 -

2 Mr Akinsola Akinfemiwa GMD/ CEO 65,061,132 - 3 Mrs Moronkeji Onasanya Vice Chairman 4,326,666 - 4 Mr Kehinde Durosinmi-Etti DMD 4,107,714 - 5 Mr Olugbenga Ademulegun Executive Director 3,973,031 - 6 Mrs Amaka Onwughalu Executive Director 892,857 -7 Mrs Ibiye Ekong Executive Director 3,602,840 -8 Mr Dotun Adeniyi Executive Director 2,788,309 -9 Mr Timothy Oguntayo Executive Director 2,756,366 -10 Mr Kolawole Awodein Director 242,636 - 11 Princess Adenike Adeniran Director 910 190,939,998

12 Mr M.G. Tarfa Director 39,999 29,212,195

13 Mr. Victor S. Adenigbagbe Director 125,863 -

14 Mr Vinay Tuteja Director 2,000,000 97,532,755

15 Dr Jason Fadeyi Director - 509,999,99816 Mr Olatunde Ayeni Director 95,938,174 -

Skye Bank: Shareholders (Cont’d)

42

Caution regarding forward-looking statements

This presentation may contain certain forward-looking statements,

estimates and targets with respect to the operating results, financial

condition and business of Skye Bank. Such statements and information,

although based upon Skye Bank’s best knowledge at present are

certainly subject to unforeseen risk and change. Future results or

business performance could differ materially from those expressed or

implied by such forward-looking statements and forecasts. The

statements have been based upon a reference scenario drawing on

current market conditions, economic forecasts and assumptions,

competitor analysis including the regulatory environment.

43

Thank you…..