AMCON Liabilities Increase to N5.87trn – Report
Worsening total liabilities net asset ratio could hasten the process of winding up Asset Management Corporation of Nigeria (AMCON). The latest data from the Central Bank of Nigeria (CBN) showed that the carrying value of AMCON liabilities printed at ₦5.87 trillion at the end of June 2023.
The corporation’s total liabilities status translates to a 2.62% year-on-year increase from ₦5.72 trillion AMCON recorded at the end of June 2022. Of more than 370 of banks debtors are pursuing, more than 70% are in court.
These court cases have lingered for more than a decade since AMCON was set up. Amidst these, many shareholders of listed banks have been clamouring for liquidation of the corporation as a result of increased payment to its sunk fund.
MarketForces Africa gathered that AMCON charges banks 5% on the size of the balance sheet. Some analysts believe this is a disincentive for local lenders to expand total assets.
The corporation has tried for about 13 years unsuccessfully to recover bad loans it bought from banks which was the reason it was set up. Though liabilities advanced in the period, AMCON’s net assets advanced strongly, according to the report posted by the apex bank on its website.
According to the latest data from the CBN, AMCON’s total assets net of impairment stood at ₦1.17 trillion as of the end of June 2023. This represents 30.69% year-on-year growth from ₦896.49 billion posted as of 2022.
The CBN said the value of the AMCON Note remained at ₦3.86 trillion at the end of June 2023, while the bad bank’s ₦500.00 billion loan plus accrued interest of ₦15.00 billion was fully repaid on January 31, 2023.
AMCON said it has recovered about N1.6 trillion in more than ten years of its existence. The sum came from cash recoveries and the sale of confiscated assets from debtors, Ahmed Kuru said in a statement.
Recently, the Minister of Finance and Coordinating Minister of the Economy Wale Edun said the federal government is working to wind down AMCON amidst rising liabilities.
“As initially conceived, AMCON was not to remain in perpetuity but was to exist for only 10 years. However, the inability to recover loans bought has led to an extension of the tenor of the existence of the corporation”, Edun said.
The minister, however, noted that the ability of the bad bank to be wound down after nearly thirteen years of operation would depend on its ability to offset its huge liabilities. #AMCON Liabilities Increase to N5.87trn – Report Naira Devaluation Deepens Economic Crisis in Nigeria