Nigeria’s major financial institution, Zenith Bank Plc, has said it has made a provision on 30% of its loan to 9mobile, the country’s fourth largest telecoms group formerly known as Etisalat Nigeria.
The bank’s GMD, mR. Peter Amagbo said: “We have taken about 30 percent … as a provision which we believe is very prudent as the company is undergoing restructuring … to prepare for a new investor, the bank chief told a conference call”.
Recall that Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.
The telecoms, 9Mobile, had taken out a $1.2 billion loan four years ago from a consortium of banks but struggled to repay it due to a currency crisis and a recession in Nigeria.
Although Zenith Bank has declined to disclose its total exposure to the telecoms group, a source close with the matter said the bank is the largest lender to 9Mobile.
Last week, Zenith Bank reported a pre-tax profit of 92.18 billion naira for its half year against 53.91 billion a year ago.
The bank’s shares were down 1.05 percent on Monday. Zenith Bank had announced a 0.25 naira dividend payout with its half-year results, which disappointed the market.
The local banks which participated in 9Mobile’s loan deal are: Zenith Bank GTBank, First Bank , UBA, Fidelity Bank, Access Bank , Ecobank, First City Monument Bank , Stanbic IBTC Bank and Union Bank.