Zenith bank makes 30 percent provision on its loans to 9Mobile, declares 25 kobo dividend payout

shakirudeen taiwo

August 17, 2017 4:39 PM

The bank is reported to have the largest share of the $1.2 billion loans given to 9Mobile by the consortium of 10 Nigerian banks in 2013.

Zenith Bank has the largest exposure in the $1.2 billion loans to 9Mobile, formerly Etisalat Nigeria.

Zenith bank Plc has declared a 30 percent provision on its loans to 9Mobile, formerly known as Etisalat Nigeria.

The bank’s Chief Executive, Mr Peter Amangbo, stated this during a conference call on Monday, August 15, 2017. He said the move is to ease the restructuring process of the telecom company.

9Mobile is the fourth largest telecom company in Nigeria.

"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 told Reuters.

9Mobile, formerly Etisalat Nigeria, took a $1.2 billion loans from a consortium of banks in 2013. Due to a currency crisis and economic downturn in Nigeria, the telecoms failed to meet the repayments plans as agreed.

As a result, 45% of its equity stakes was transferred to the banks. Also, Etisalat International and the Mubadala Investments Group exited the business in June 2017.

Though, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) moved in to prevent the company's collapse.

Afterwards, a new board and management team were constituted to lead the company’s restructuring process.

The local banks in the consortium are Zenith Bank, GTBank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, First City Monument Bank, Stanbic IBTC Bank and Union Bank. But Zenith Bank is stated to have the largest exposure (lender) to the troubled telecoms company.

Zenith Bank reported a pre-tax profit of N92.18 billion for its half year 2017, against N53.91 billion in 2016.

Also, the bank’s shares shed 2.21 percent at the closing of trading on Tuesday, August 16, 2017, after declaring 25k dividend payout with its half year result. The dividend is below market expectation.

shakirudeen taiwo

Enhance Your Pulse News Experience!

Get rewards worth up to $20 when selected to participate in our exclusive focus group. Your input will help us to make informed decisions that align with your needs and preferences.

I've got feedback!

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng