Access Bank Plc said on Wednesday it had booked a N4bn impairment on its loan to 9mobile, formerly known as Etisalat Nigeria.
The Access Bank’s Chief Executive Officer, Herbert Wigwe, said the bank had a direct exposure of N11bn to 9mobile, as well as an exposure of N35bn-N39bn to the telecoms firm’s suppliers.
Wigwe told an analysts’ call that Access Bank hoped to recover the debt once 9mobile was sold to new investors, Reuters reported on Friday.
Local banks have agreed an extension to a $1.2bn loan made to 9mobile, pending the mobile operator finding new investors.
However, some lenders outside the syndicated facility are making provisions.
“We have downgraded the risk of Etisalat and have taken increased collective impairments,” he said.
Access Bank said non-performing loans rose to 2.5 per cent by the half-year from 2.1 per cent as at December, though it posted an 18.4 per cent rise in half-year pre-tax profit to N52.08bn last week.
Regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing it in receivership, prompting a board, management and name change.
Wigwe said 9mobile had received significant interest from local and international investors after lenders appointed advisers to find new investors.
It expected a sale to close within six months.
Banks have appointed Citigroup and Standard Bank to manage the sale.
Wigwe said Access Bank had sufficient reserves to cushion losses that could arise from the sale. He, however, added that the bank was far from that scenario because 9mobile had a stable subscriber base and that the business had experienced stress due to the way the previous owners managed it.
“It’s extremely unlikely for anybody to say that we would find ourselves at a 50 per cent impairment level. We may see 30 per cent impairment level perhaps because we want to sell it very quickly,” he said.
Access Bank shares, which have gained 70.4 per cent so far this year, dipped 3.9 per cent to N9.59 on Wednesday.
The United Bank for Africa Plc had on Tuesday announced a prudential provision on loans made to 9mobile.
The lender did not give details of the provision but said it had a N38bn exposure to 9mobile.
UBA said the exposure was secured, and part of a syndicated loan with 12 other banks extended to Etisalat Nigeria four years ago.
“We have taken a general loan loss provision on Etisalat,” the Chief Executive Officer, UBA, Kennedy Uzoka, told an analysts call.
“It’s instructive to note that Etisalat has reasonably turned around in terms of subscribers and revenues,” he said, adding that the bank was one of the lenders managing its receivables.
Zenith Bank said this month it had made a 30 per cent provision on its loan to 9mobile.