Herbert Wigwe, Group Managing Director of Access Bank Plc, on Wednesday provided further insights into the audited half-year financials, when he told investors during an conference call that Access Bank booked N4bn (about $13m) impairment on its loan to telecom giant formerly known as Etisalat Nigeria
He put the bank’s direct exposure of N11bn, besides an exposure of between N35bn and N39bn to the firm’s suppliers, expressing hope that the debt would be recovered once 9mobile was sold to new investors within the next six months, through a process managed by Citigroup and Standard Bank.
Nigerian banks have agreed an extension to a $1.2 billion loan made to 9mobile, pending the mobile operator finding new investors, following which . However, some lenders outside the syndicated facility are making provisions.
“With respect to their parent, I think as a starting point, nobody walks into a system and takes so many loans and wakes up to say, ‘Oh I have gone.’ It doesn’t add up. So we still have recourse to them.”
Already, he continued, “we have downgraded the risk of Etisalat and have taken increased collective impairments,” he said, assuring that 9mobile has received significant interest from local and international investors after lenders appointed advisers to find new investors, just as he hinted that the bank may square up with UAE’s Etisalat Group later for walking away from the loans.
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% impairment level perhaps because we want to sell it very quickly,” he said.
Access Bank said non-performing loans rose to 2.5% by the half-year from 2.1% as at December, just as it posted an 18.4% rise in half-year pretax profit to N52.08bn last week.
He also spoke of plans to conclude and commence the implementation of its 2018-22 corporate strategy outlook soon to lead the bank to the next phase of its growth and development.