Shareholders have urged the Federal Government to tighten the noose on debtors and urgently relieve the banks of AMCON operational burden after becoming apparently irritated by the levies imposed on commercial banks to sustain the Asset Management Corporation of Nigeria (AMCON) and the declining returns on investments.
In light of the significant costs to banks, the shareholders acting under the auspices of Independent Association of Nigeria (ISAN) expressed their concern. After 12 years of existence, they contended, the company had proven its failure to successfully handle hazardous debts.
Sunny Nwosu, Coordinator Emeritus of ISAN, stated to media in Lagos over the weekend that shareholders are concerned about the losses reported by AMCON despite the company earning significant bank fees and experiencing difficulties selling the recovered goods from debtors.
Nwosu bemoaned the corporation’s terrible performance, noting that it had recovered a pitiful N1.4 trillion since its creation and that non-performing loans (NPL) had soared by more than 150% once more.
He said that when the agency first started operating, it paid N1.8 trillion for 12,743 NPLs or eligible bank assets (EBAs) from 22 eligible financial institutions (EFIs) valued at N3.8 trillion. He also said the corporation made N327.6 billion from 0.5% charges on nine banks’ total assets, both on and off-balance sheet items, between 2020 and 2021.
“AMCON’s levies on commercial banks increased from N146.9 billion in 2020 to N180.67 billion in 2021. As part of the quick intervention in the banking sector bad debts, by Central Bank of Nigeria (CBN) through AMCON, the debt recovery agency equally received N125.9 billion from 12 commercial banks listed on the Nigerian Exchange Limited (NGX) as part of the sector’s resolution funds in the first quarter of 2022.”
He claims that over the same time period, AMCON bank charges climbed by 29.5%, from N97.18 billion paid during the same period of 2021 to N125.9 billion in the first quarter of 2022.
“After 12 years of the agency’s operations, Nigerian shareholders have come to the conclusion that the funding of AMCON with levies from commercial banks cannot be continued because of its negative impact on returns on investment and the incapacitation of commercial banks to adequately intervene in the nation’s real sector”, Nwosu stated.
He made the point that many corporations and most commercial banks who owe money to AMCON are today struggling to stay afloat in the face of several lawsuits since it seems improbable that the company will achieve its objectives.
“Our conclusion is that the corporation is on the verge of losing the Nigerian tax payers’ money spent in repurchasing critical toxic assets from troubled banks and other entities.
“As concerned domestic investors, our patriotism is not in doubt as we demand once again the complete review of AMCON to determine its relevance to the economy or totally abrogate the agency following the declining values of companies taken over by the corporation and the current national economic challenges”, he said.
He asserted that their activities must cease with the massive financial bailout package given to the banks to shore up their capital base, as done in the majority of developing countries, and characterized the federal government’s flotation of AMCON as a distraction that has prolonged the banking industry challenges.
“Our position, like we said before, is that AMCON has overstayed its function and urged the CBN to suspend levying commercial banks. We are averse to AMCON successfully lobbying the federal government and lawmakers to extend its operations but our opinion remains that if CBN wants to sustain AMCON, it must not be through levies from the banking industry.”
“In real terms AMCON’s 10 years life span has ended, the elongation of its life span amounts to playing games with taxpayer’s money and shareholders’ funds. AMCON is killing the banking industry and the entire financial services sector.”
“Overall we want the federal government to tighten the noose on debtors and reject the aroma of the free funds from the banking industry levies but reflect on the negative impact of the levies on the real sector and the economy,” he advised.