N11bn loan: Access Bank looks beyond 9mobile

Nigeria’s Access Bank said on Wednesday it had booked a 4 billion naira ($13 million) impairment on its loan to troubled telecoms firm 9mobile, formerly known as Etisalat Nigeria.

Access Chief Executive Herbert Wigwe said the bank had a direct exposure of 11 billion naira to 9mobile, as well as an exposure of 35-39 billion naira to the telecoms firm’s suppliers.

Wigwe told an analysts’ call that Access hoped to recover the debt once 9mobile was sold to new investors.

“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 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.

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 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.

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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 shares, which have gained 70.4 percent so far this year, dipped 3.9 percent to 9.59 naira on Wednesday.

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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.