Zenith Bank Plc says it has made a provision of 30 per cent on its loan to 9mobile, the country’s fourth largest telecoms company formerly known as Etisalat Nigeria.
“We have taken about 30 per cent … as a provision which we believe is very prudent as the company is undergoing restructuring to prepare for a new investor,” the bank’s Chief Executive Officer, Mr. Peter Amangbo, told a conference call on Monday, Reuters reported.
The Federal Government had stepped in last month to save Etisalat Nigeria from collapse and prevent commercial banks from placing the telecoms firm into receivership.
The move led to board, management and name change.
The telecoms firm had taken out a $1.2bn loan four years ago from a consortium of banks but failed to repay it due to foreign exchange crisis and recession in the country.
Zenith Bank is the largest lender to 9Mobile, one source familiar with the matter said. The bank has declined to disclose its total exposure to the telecoms group.
Last week, Zenith Bank reported a pre-tax profit of N92.18bn for its half year against N53.91bn a year ago.
The bank’s shares were down 1.05 per cent 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 the 9Mobile’s loan deal are: Zenith Bank, Guaranty Trust Bank Plc, First Bank of Nigeria Limited, United Bank for Africa Plc, Fidelity Bank Plc, Access Bank Plc, Ecobank Nigeria, First City Monument Bank Limited, Stanbic IBTC Bank and Union Bank of Nigeria Plc.