Zenith Bank has made a provision on 30 percent of its loan to 9mobile, the country’s fourth largest telecoms group formerly known as Etisalat Nigeria, the bank’s Chief Executive Officer (CEO) said on Monday.
“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,” Mr. Peter Amangbo reportedly told a conference call.
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.
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 the recession in Nigeria.
Zenith Bank is the largest lender to 9Mobile, according to a source familiar with the matter. The bank has declined to disclose its total exposure to the telecoms group.
Last week, Zenith Bank reported a pre-tax profit of N92.18billion for its half year against N53.91 billion a year ago.
The bank’s shares were down 1.05 percent on Monday. Zenith Bank had announced a N0.25 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.