20091217

TUNIS (Reuters) - The African Development Bank (AfDB) on Wednesday signed an agreement to lend Nigeria's United Bank for Africa (UBA) $150 million, the biggest loan it has given to date to a private sector institution in Africa.

The AfDB said the cash would allow UBA to keep credit flowing to its corporate customers, filling the gap left after lending slowed in the global downturn.

"Coming at a time of severe credit constraints globally, this deal ... is a major recognition of UBA's ability to support private and public enterprises across Africa" said Faith Tuedor-Matthews, UBA's Deputy Managing Director.

UBA is one of Nigeria's biggest banks in terms of assets. It has operations in Kenya and a presence in 10 other African countries.

A number of Nigerian banks have had problems with bad loans triggered by the downturn. The central bank rescued nine of them this year with a $4 billion injection.

UBA was not one of the banks which received cash in the bailout. Analysts say it is one of four Nigerian banks with healthy balance sheets which are likely to play a role in a wave of banking sector consolidation in the wake of the slump.

PROFITS EXPECTED

Asked at a signing ceremony at the AfDB's headquarters in Tunis about her bank's financial outlook, Tuedor-Matthews said: "We expect some profits at the end of December." She did not give any further details.

In its last quarterly results, the bank said its pre-tax profits dropped 36.6 percent from a year earlier because of provisions it had to make for loan losses.