- Nigerian banks set to receive good news soon as the federal government has decided to wind down AMCON
- AMCON, which was introduced in 2011 was to help recover the bad loans in the banking system
- To achieve this AMCON remove 0.5% of every banks’ total assets, including off-balance sheet assets
The Federal Government is working towards ensuring that the Asset Management Corporation of Nigeria (AMCON) winds down as soon as possible.
This was disclosed by Wale Edun, finance minister and Coordinating Minister of the Economy over the weekend while speaking with journalists BusinessDay reports
Photo creditL Presidency
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The finance minister said the initiative is aimed at bringing relief to financial institutions such as Access Bank, Zenith Bank, Guaranty Trust Bank (GTB), United Bank for Africa (UBA), and several others.
What is AMCON charges?
AMCON was established in 2010 in a bid to stabilize the Nigerian banking system by efficiently resolving the non-performing loan assets of the banks in the economy.
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To achieve this, banks were initially required to pay 0.3% of all assets into the sinking fund. In 2013 it was raised to 0.5% of total assets (and 0.3% of contingent liabilities).
The AMCON charges have been source of concerns for banks shareholders with complains that it is discouraging investment in bank stocks.
Legit.ng in an earlier report revealed that eight banks incurred N112.15 billion AMCON charges in their books
FG moves to end AMCON
While discussing the economic plan of Tinubu, Edun said:
“On AMCON work is being done to ensure as much as possible that AMCON meets its mandate of winding up in the very near future.
“So, it is a question of financial engineering is a question of making arrangements for sidedly taking care of the liabilities.
“And those responsible include the banking system which has a portion to pay, as well as central bank and other stakeholders.”
The challenges ahead
Ahmed Kuru, AMCON’s managing director, disclosed recently that there is a total of N4.664 trillion liability burden in terms of cash and sale of assets.
According to him, about 350 obligors account for N3.957 trillion, which is above 84 per cent of the total outstanding amount.
Zenith Bank chairman Jim Ovia makes over N13bn in 5 hours, buys more shares
In another report, Legit.ng revealed that Jim Ovia, the owner of Zenith Bank, has purchased additional shares in his bank.
The new shares were purchased after he made over N13 billion from President Tinubu’s inaugural speech.
He made money between 9:30 and 14:30, the trading hours of the Nigerian stock market.
Source: Legit.ng
