The Asset Management Corporation of Nigeria (AMCON) might cease to be operational as the Central Bank of Nigeria (CBN), Nigerian Deposit Insurance Corporation (NDIC) and Ernst & Young called for the institution to be scrapped.
According to The Nation, the Managing Director/CEO AMCON, Ahmed Kuru, while speaking during a retreat with members of the House Committee on Banking and Currency, AMCON is in talks with the National Assembly and the three institutions calling for the shut down of its operations to resolve all issues.
“We are working with the three institutions to tinker things a little and then at certain point in time liaising with the National Assembly to draw a line,” Ahmed Kuru.
However, Mr Kuru reportedly requested that AMCON should be given considerable time to sell off all the debts under its purview. It suggested that the remaining AMCON debt should be put under a single vehicle and sold off to any interested entity at a discount.
“My suggestion will be to put all the remaining debt in one vehicle and fling the vehicle to anybody or firm that wants to buy with considerable discount. At that stage maybe it would be wise to do that and then close AMCON. There are funds all over the world that are in search of such opportunity. Then the contributions into the sinking fund from the banks, NDIC and CBN would over the period of two or three years depending on how the rates are adjusted be gradually cleared.”
AMCON’s performance so far: Mr Kuru reportedly disclosed that AMCON purchased 12,743 Non-Performing Loans/Eligible Bank Assets (EBAs) worth N3.8 trillion from 22 Financial Institutions (FIs) for N1.8 trillion. The corporation injected N2.2 trillion into 10 banks, capitalizing three and provided financial accommodation to five.
AMCON has resolved about 4,000 EBAs out of the 12,743 EBAs bought while more than 8,000 EBAs are still outstanding. The corporation reportedly has 71 of EBAs currently under receivership.
What you need to know about AMCON: According to its website, the corporation was established on the 19th July 2010 when the President of the Federal Republic of Nigeria signed the AMCON Act into Law. AMCON was created to be a key stabilizing and re-vitalizing tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy.
AMCON’s mission is to:
- complement the recapitalization of affected Nigerian banks;
- provide an opportunity for banks to sell off Non-Performing Loans(NPLs);
- free up valuable resources and enabling banks focus on their core activities; and
- to propel the lending ideology in banks again.