It was an unwelcome surprise for many last month when UBA, Nigeria’s third-biggest bank, said it would probably report a loss for 2011. The much-trumpeted theory had been that the worst was over for Nigeria’s banks, thanks to a clean-up of the 2009 margin-lending crisis.
UBA said the main problem was a write-down on the latest batch of debt sold at a discount to the state bad bank, Amcon. The biggest chunk was a 40% haircut of almost $100 million on a loan to Zenon, a downstream oil and gas company active in Nigeria’s multi-billion-dollar petroleum-imports business.
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