Nigeria’s United Bank for Africa (UBA) said Tuesday it had made a provision on loans made to 9mobile, one of the country’s mobile operator formerly known as Etisalat Nigeria.
According to Reuters, the lender did not give details of the provision but said it had a 38 billion naira ($125 million) 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.
Nigerian banks have agreed on 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.
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“We have taken a general loan loss provision on Etisalat,” Kennedy Uzoka,UBA Chief Executive told 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 percent provision on its loan to 9mobile, the country’s fourth-largest telecoms group.
Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing it into receivership, prompting a board, management, and name change.
Last week UBA said its first half pre-tax profit rose 66 percent to 57.5 billion naira, while its non-performing loan ratio rose to 4.2 percent in the half-year, up from 3.9 percent a year earlier.
Uzoka said Nigeria is its largest market, but that he expects the bank’s African operation to contribute about 50 percent to group earnings over the medium term from 32 percent in the first half of the year.
He said the lender had applied to British regulators for a banking license.
UBA shares, which have gained 114 percent so far this year, dipped 0.52 percent to 9.58 naira Tuesday.
Frontpage September 9, 2019