The Asset Management Corporation of Nigeria (AMCON) said it has repaid N2 trillion out of its N4.7 trillion commitment to the Central Bank of Nigeria (CBN).
AMCON’s Managing Director/CEO Ahmed Kuru said said the corporation has achieved its first mandate of purchasing the Non-performing Loans (NPLs) and providing liquidity to the commercial banks.
In terms of recoveries, he said AMCON has made a total recovery of above N1.2 trillion, sold assets worth about N500 billion and resolved close to 5000 Eligible Bank Assets (EBSs).
“We are focused on the second and most difficult phase of recovery and restructuring of the bad loans. Recall that AMCON acquired over 12,000 NPLs worth N3.7 trillion from 22 banks and injected N2.2 trillion as financial accommodation to 10 banks to prevent systemic failure. As a result of this intervention, our current liability with CBN is around N4.7trillion while the N2 trillion had been repaid so far,” he said.
He said before AMCON was established, the economy was in a dire straits. “There were foreign portfolio withdrawals of credit lines and investment from Nigeria; the stock market also collapsed leading to loss of about 80 per cent of its value and the banking industry crisis deepened due to poor risk management that led to increase in the Non-Performing Loans (NPLs) of the banks as a percentage of industry loans,” he said.
“At a point in 2009 NPLs as percentage of all bank loans was as high as about 37.25 per cent. I salute the courage and the wisdom of the Central Bank of Nigeria (CBN) for quickly intervening by proposing to the National Assembly the need to set up an Asset Management Corporation to stabilise the economy, which was the global trend at that time”.
Kuru said the fundamental objectives for the establishment of AMCON was to—rescue commercial banks and some underlying strategic businesses in Nigeria from the brink of collapse in the aftermath of the global financial crises of 2008 through acquisition of non-performing loans and to dispose of the underlying assets in the most profitable manner.
