AMCON made a N254 billion loss in 2016
MD of the bad bank Mohammed Kuru said the possibilities of an AMCON II were unlikely. Kuru was of the opinion that doing so, would make banks to cook up bogus loans. AMCON was established in 2010 through an act of the National Assembly and has a lifespan of 10 years.
“We have stopped purchasing loans. If any bank has a challenge, it should be tackled within prudential guidelines. Buying more loans will encourage rascality and make banks to be cooking all manner of loans”
Here are key points from the AMCON results:
- AMCON reduced its loss from N304.2 billion in 2015 to N254 billion in 2016.
- Losses incurred from its subsidiaries pushed the group loss from N295.45 billion to 2015 to N352.15 billion in 2016.
- Kuru said AMCON had invested over N300 billion to support businesses. Going forward, it would no longer be doing that.
- AMCON has stopped buying loans from commercial banks.
The bank was also close to selling its stake in Peugeot Automobile Nigeria (PAN), assembly plant to a consortium made up of Dangote Industries, Bank of Industry (BOI), Kaduna and Kebbi States. The Central Bank of Nigeria (CBN) and Nigerian Deposit Insurance Corporation (NDIC) are considering a private sector led version of AMCON.
Banks by their recent actions have foreclosed a possibility of an AMCON II. Ecobank has created its own bad bank for impaired loans. Unity bank, last week signed a sales and purchase agreement with a private firm Frontier Capital Alternative Asset (FCAA) in respect of its non- performing loans.
Though Kuru maintains AMCON’s duration will not be extended, the situation on ground appears totally different. The bank is yet to recover several of the loans it bought from banks. It is also yet to unwind some of the assets in its books, such as Arik which is in a worse shape than the bank envisaged. Several court cases for and against the bank are currently pending.