Fidelity Bank takes charges on 9mobile loan after CBN’s request

Fidelity Bank

• Facebook launches Africa’s first SMEs Council in Nigeria
Fidelity Bank has taken five per cent impairment charges on a N17.3 billion ($55 million) loan to Etisalat Nigeria, now 9mobile.

Reuters yesterday, quoted Managing Director of the bank, Nnamdi Okonkwo, as saying it was based on a Central Bank of Nigeria (CBN’s) directive.

Etisalat Nigeria took a $1.2 billion syndicated loan from a group of 13 local banks four years ago but has defaulted on repayments this year due to a currency crisis and recession in Nigeria.

Industry sources claimed that the CBN had last week asked lenders in the deal to take a five per cent provision as part of their third-quarter result

Okonkwo said the financial institution was also making provisions in its books.

“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 called 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 per cent loan growth this year,” he added.

The bank posted a pretax profit of N16.24 billion for the nine months to September, up from N9.83 billion last year.

However, the Senate voted in favour of investigating Etisalat Nigeria’s defaults and how its funds were used.

It said it was aware of allegations that the loans had been diverted to other uses not related to the business, as there was no evidence of what the company did with the loans.

Meanwhile, Facebook has launched its first Nigerian Small and Medium scale Enterprises (SMEs) Council in Africa.

It is part of Facebook’s ongoing commitment to help support SMEs across the Africa continent.

The Nigerian SME Council brings together Facebook Africa’s SME team and Nigerian business owners from a range of industries, in a partnership designed to provide better digital tools for business and customer growth.

Speaking at the launch, Facebook’s SMB Sales Manager, Europe, Middle East and Africa, Abi Williams, said small businesses form the backbone of most thriving economies in the world, driving sustainable growth and creating jobs, and those in Nigeria would not be different.