- Fidelity Bank Takes Impairment on 9mobile Loan
Fidelity Bank Plc has taken a five per cent impairment charge on a N17.3 billion ($55 million) loan to Etisalat Nigeria, now called 9mobile, its Chief Executive Nnamdi Okonkwo said on Wednesday.
This, according to Okonkwo, was in line with a Central Bank of Nigeria’s (CBN) request.
Etisalat Nigeria took out a $1.2 billion syndicated loan from a group of 13 local banks four years ago but defaulted on repayments this year due to a currency crisis and recession in Nigeria.
A banking source told Reuters last week that the central bank had asked lenders involved in the loan to take a five per cent provision as part of their third-quarter results.
Okonkwo said Fidelity Bank was also raising provisions across its loan book.
“We are revising (the non-performing loan ratio) from sub-5 percent to sub-6 percent by end of the year, due to currency conversion and some risk on the oil and gas book,” he told an analysts’ call held to discuss its nine-month results.
“We have seen some improvements in the transport sector and the consumer book.”
Net loans stood at N753.8 billion as of September, up 4.9 per cent from a year earlier. The bank was targeting 7.5 percent loan growth this year, Okonkwo said.
Fidelity Bank on Monday posted a pre-tax profit of N16.24 billion for the nine months through September, up from N9.83 billion a year ago.
The Senate on Tuesday voted in favour of launching an investigation into the default of Etisalat Nigeria and into how its funds were used.
Nigerian lenders have picked Barclays to try to find new investors for 9mobile, two banking sources told Reuters last week.
Okonkwo also said the bank had submitted details of personal and business accounts that lacked complete Bank Verification Number to the central bank, following a court order. He declined to say how many accounts were involved.
A court had ordered a temporary freeze on millions of bank accounts with incomplete identification documents and the forfeiture of funds in those accounts as the government seeks to ensure compliance with money laundering rules.
The bank said it had notified customers about the court ruling and advised them to regularise their accounts.
