Ecobank says working to restructure loans to Nigerian states

Ecobank is working on a plan to restructure its loans to Nigerian states, after putting almost a third of those loans a watch list as the finances of the states grow more precarious, the pan-African lender said on Friday.
Ecobank has loaned $150 million to various Nigerian states. Of that, $45 million was placed on the watch list. Loans to governments make up about 3 percent of Ecobank's loan portfolio and about 5 percent of all loans to the Nigerian states.
In a conference call to investors, the bank said it was working on remedial action proposed by Nigeria's Debt Management Office to restructure the debt into a 20-year government bond.
"By half-year, we have restructured $103 million worth of loans made to construction, public sector and service segments in Nigeria," said Ecobank's chief risk officer, Dayo Orimoloye. "We are in the process of restructuring $75 million in the upstream oil and gas sector."
Nigeria's 36 states are in debt to the tune of 658 billion naira ($3.3 billion), and one way out of the credit crunch would be for banks to extend the maturity of loans made to them as much as 20 years, one of the state governors has said.
Several states borrowed in the domestic bond market and from banks to fund infrastructure projects. But the price of crude oil, which represents 70 percent of Nigeria's revenue, has since plunged, leaving the government unable to pay bills or salaries.
Ecobank also said it had placed on the watch list $35 million of loans to state government employees and municipalities in Nigeria.
Central Bank Governor Godwin Emefiele has asked the states to submit their loan obligations to enable the bank to restructure them.
Ecobank said it had restructured a total of $177 million across the group, with Nigeria accounting for half the amount, Orimoloye said.
The lender on Thursday posted a 47.4 percent rise in half-year pretax profit to 61.41 billion naira ($309 million). Its shares fell 2.41 percent, but ithas gained 4.95 percent this year.

Ecobank said it had obtained board approval to raise fresh funds to help strengthen the capital base of its Nigerian subsidiary as the country prepares to adopt stricter international requirements. (Editing by Larry King)