The Asset Management Corporation of Nigeria, AMCON has said that it has recovered about 57% of the bad debts it took over from Nigerian banks five years ago, according to an article from Bloomberg.
“We’re a little bit behind, but not too far behind, what we expected,” Chief Executive Officer Mustafa Chike-Obi said in an interview in Lagos. “The courts are a constraining factor. As much as we want to carry a hammer, we still have to go through the court system and remain an institution that obeys the laws. That takes time.”
The state-owned agency, known as Amcon, managed to collect or reorganize the debt it bought at a rate of 1.07 times for what it paid for them, above its 80 percent target, he said. Modeled on organizations including Ireland’s National Asset Management Agency Ltd. and Korea Asset Management Corp., Amcon used bonds to bail out 10 lenders and buy more than 12,000 loans from industries including aviation, gasoline marketing and manufacturing for about 1.8 trillion naira ($9 billion).
A clean up of the industry means Nigerian banks are better able to withstand shocks even as non-performing loans rise following the latest oil slump, Chike-Obi said. It is unlikely that lenders will be offered another bailout, he said. “If the central bank, whose decision it is mostly, did ask us, we’d have to think very seriously about it,” he said in an interview in Lagos this month. “But there’s not much appetite from the central bank, Amcon or the nation for this. Nobody wants it.”
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