08 November 2013, Lagos – Zenith Bank Plc has said it will increase loans to the firms that acquired the recently privatised power assets.
The bank’s loans to the power sector may rise to 10 per cent of its loan book by next year, up from 4.3 per cent in the third quarter and 1.3 per cent at the end of June, its Group Managing Director/Chief Executive Officer, Mr. Godwin Emefiele, said in an interview with Bloomberg, Thursday.
President Goodluck Jonathan last week handed over 14 power plants in September to buyers. The move is expected to end daily blackouts in country.
“Opportunities in power opened up and we took advantage of it,” Emefiele said.
“It is a very essential utility that we all need for our survival.”
The value of Zenith Bank’s loans to power companies was about N40 billion in the third quarter after the handover, Emefiele added.
Zenith Bank gave loans to companies including Eko Electricity Distribution Company and Ikeja Electricity Distribution Company both in Lagos state.
“As we review the companies and we see viable propositions, yes we will expand loans to the industry,” he said.
Zenith Bank’s nine-month net income rose 16 per cent from a year earlier to N68.9 billion with revenue advancing 12 per cent. The lender expects “steady growth” next year, with total loans rising 15 to 20 per cent, Emefiele declared.
The Central Bank of Nigeria, which has kept its key interest rate at a record high of 12 percent for two years to stabilise the naira and curb inflation, is unlikely to ease policy next year before elections in 2015, the Zenith Bank boss said.
The CBN Governor, Mallam Sanusi Lamido Sanusi, had warned in September of an increasing demand for dollars being used for political patronage before elections.
“There’s going to be a lot of spending and the central bank has a lot of work to do in controlling the spending so that it doesn’t spiral into interest rate effects too,” Emefiele said.
– This Day