By Chinwendu Obienyi
Following sustained depressed returns on investments arising from excessive commercial banks’ debts, shareholders at the weekend urged the Federal Government to tighten the noose on debtors and reject the aroma of the free funds from the banking industry levies.
The shareholders under the aegis of Independent Association of Nigeria (ISAN), said that despite the operations of Asset Management Corporation of Nigeria (AMCON) over the last 12 years, it has demonstrated its inability to successfully put the debt recovery issue to rest.
Speaking to newsmen at the weekend, the Coordinator Emeritus, ISAN, Sir Sunny Nwosu, said shareholders are concerned about the losses reported by AMCON despite collecting huge levies from banks and having challenges in selling recovered assets from debtors.
Nwosu said the poor performance of the Corporation remained a cause for concern for Nigerian shareholders, adding that the agency recovered only a paltry N1.4 trillion from inception with data showing that non-performing loans have again increased by more than 150 per cent.
He noted that at the commencement of its operations, the agency purchased 12,743 non-performing loans or eligible bank assets (EBAs) valued at N3.8 trillion from 22 eligible financial institutions (EFIs) for N1.8 trillion and added that the Corporation earned about N327.6 billion from 0.5 per cent charges on banks’ total assets on and off-balance sheet items imposed on nine banks 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.
In the same period AMCON bank charges increased by 29.5 per cent from N97.18 billion paid in the corresponding period of 2021 to N125.9 billion in the first quarter of 2022.
But 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.
According to him, most commercial banks and numerous corporate concerns indebted to AMCON currently struggle to remain afloat in the face of numerous litigations as the corporation appears unlikely to meet its set goals.
“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 further added that the federal government floating of AMCON is a distraction that has prolonged the banking industry challenges and must be eliminated with huge funds intervention like in most developing and developed climes.
“Our position, like we said before, is that AMCON has overstayed its welcome and we urge the CBN to suspend levying commercial banks.
We are averse to AMCON successfully lobbying the Federal Government and law makers 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”, Nwosu said.