Access Bank Takes N4b Impairment on 9mobile Loan
By Modupe Gbadeyanka
Chief Executive Officer of Access Bank, Mr Herbert Wigwe, has revealed that the lender has booked a N4 billion impairment on its loan to Etisalat Nigeria, which recently changed its name to 9mobile after its main investor pulled out of the business.
Speaking during an analysts’ call yesterday, Mr Wigwe said Access Bank hopes to recover the debt once 9mobile was sold to new investors, which will likely happen before the end of December 2017.
According to him, the financial institution had a direct exposure of N11 billion to 9mobile, as well as an exposure of N35-N39 billion to the telecoms firm’s suppliers.
Nigerian banks have agreed an extension to a $1.2 billion loan made to 9mobile, pending the mobile operator finding new investors. However, some lenders outside the syndicated facility are making provisions, Reuters reports.
“We have downgraded the risk of Etisalat and have taken increased collective impairments,” the bank chief said.
Mr Wigwe said 9mobile has 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.
Lenders have appointed Citigroup and Standard Bank to manage the sale.
Mr Wigwe said Access Bank has sufficient reserves to cushion losses that could arise from the sale. But 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 percent impairment level. We may see 30 percent impairment level perhaps because we want to sell it very quickly,” he said.
Access Bank said non-performing loans rose to 2.5 percent by the half-year from 2.1 percent as at December, though it posted an 18.4 percent rise in half-year pretax profit to 52.08 billion naira last week.
