AMCON blames N304bn loss on CBN bond interest

By Omodele Adigun
Following interest it paid on Central Bank’s N3.8 trillion bond used to acquire toxic assets, among other challenges, the Assets Management Corporation of Nigeria (AMCON) has recorded N304.35 billion loss during its 2015 fiscal year.
The figure, about N28.9 billion or 10.5 per cent higher than its N275.49 billion loss of 2014,was also attributed  to the write-down in the value of collateral recovered from its purchase of bad loans.
According to its Executive Director,  Aminu Ismail, who disclosed this to foreign wire service Thursday in Lagos, about N1.26 trillion in non-performing loans (NPLs), out of N3.7 trillion, had been settled.
He stated that 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.
On the banking side, NPLs had started building up again. Nigeria’s main rating agency, Agusto & Co, expects NPLs to jump to 12.5 percent of total loans this year, up from the central bank’s target level of 5 per cent at the end of last year.
Ismail said AMCON stopped buying NPLs two years ago and was now focused on recoveries to enable it 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.
Ismail said AMCON had received interest from buyers looking to acquire Keystone Bank after Sterling Bank dropped out.
He said the corporation will make an announcement on the sale .
Asset Management Corporation of Nigeria (AMCON) was set up in 2010 to absorb bad loans as part of resolving a financial crisis in the country.