…to wind-down operations in 2023
Asset Management Corporation of Nigeria (AMCON) yesterday posted a loss of N304.35 billion in 2015, wider than last year’s loss of N275.49 billion, after it wrote-down the value of collateral recovered from its purchase of bad loans.
Executive Director, AMCON, Mr. Aminu Ismail, said the 2015 loss was also partly due to interest paid on a N3.8 trillion bond due to the central bank which it used to acquire the bad loans.
The commission was set up in 2010 to absorb bad loans as part of resolving a financial crisis in Africa’s biggest economy. Ismail said N1.26 trillion in non-performing loans (NPLs) out of a total of N3.7 trillion had been settled.
He said NPL ratios jumped to 93 per cent of its total bad loans in 2015, up from 57 per cent a year earlier, as the weak economy impacted debt repayment.
Ismail said AMCON stopped buying NPLs two years ago and was now focused on recoveries to enable it to wind-down its activity by 2023, when its debt to the central bank matures. He said the decision to acquire NPLs would be that of the government and the central bank.
The Central Bank of Nigeria (CBN) shored up Skye Bank this month with a loan and replaced its management after its capital fell below levels required by regulators and it has been urging people not to panic about the banking system.
But pressure is building, with loan books – nearly half of them in dollars – hammered by a shrinking economy, a plunging currency and acute foreign exchange shortages in Africa’s biggest oil producing nation following the slump in oil prices.
Ismail said AMCON had received interest from buyers looking to acquire nationalised lender Keystone Bank after rival Sterling Bank dropped out. He said the corporation will make an announcement on the sale process within 4-weeks.
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