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Kuru: 350 Debtors Owe AMCON N2.5 Trillion

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Ahmed Kuru
  • Kuru: 350 Debtors Owe AMCON N2.5 Trillion

The Managing Director/Chief Executive Officer of the Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru has disclosed that the corporation’s recent assessment of obligors as at December 31, 2016 identified 350 accounts with a current exposure of N2.5 trillion, representing about 80 per cent of AMCON’s total obligor debt.

A statement quoted Kuru to have said this during a retreat for lawmakers in Enugu yesterday that was declared open by Governor Ifeanyi Ugwuanyi of Enugu State.

“AMCON has also repositioned its debt recovery approach to strengthen legal and credit restructuring units to collaborate on the aforementioned 350 accounts termed ‘defaulters,’ enhance the restructuring and turnaround team; and engage in asset tracing to enhance recovery.” “In spite of the difficulties”, Kuru said.

“AMCON continues to persevere in the face of adversity.”

Providing additional insight into the challenges of AMCON, Kuru lamented that the ramifications for failure by AMCON to recover its debt, principally owed to the Central Bank of Nigeria (CBN), cannot be quantified as it goes beyond economic cost. According to him, in the last two years, AMCON debt repayment to the CBN were N456.4 billion and N517.7 billion but actual payments were N256.7 billion and N191.1 billion in 2015 and 2016, respectively.

He added: “This translates to a funding shortfall of N199.7 billion and N326.4 billion in 2015 and 2016, respectively. Of this shortfall, repayment due from AMCON in 2015 and 2016 represented 42 per cent and 53 per cent while the resolution cost fund represented 58 per cent and 47 per cent in 2015 and 2016, respectively. The funding plan envisaged contribution of 70 per cent from the resolution cost fund and 30 per cent from recovery.”

“To put this into perspective, AMCON’s total debt obligation of N4.6 trillion represents 75 per cent of the 2016 national budget, 26 per cent of the 2016 total national debt, and 5 per cent of the country’s nominal gross domestic product in 2016. Given the current demands on the Federal Government, it is doubtful that it can afford to expense AMCON’s debt in the short term.”

Going by all these challenges of AMCON, Kuru told the lawmakers to be mindful of the proposed bill of the Nigerian Assets Management Agency (NAMA). He stated categorically that, “…we note that this Committee is reviewing the proposed bill of the Nigerian Assets Management Agency (NAMA) and request that the Committee also considers its impact on AMCON. Our position is that AMCON should not qualify as an agency as covered under the proposed NAMA bill since AMCON’s assets were principally acquired from the banking sector for the purpose of debt resolution.”

Earlier, the Chairman of House of Representatives Committee on Banking and Currency, Hon. Jones Chukwudi Onyereri has said the House of Representatives would not be lured into supporting any plot to lure AMCON to purchase new debts from banks.

Onyereri said the lawmakers agreed that it would not be the right decision for the country considering the state of the economy, which is on the pathway to recovery after sliding into recession.

Onyereri added: “We are also aware that some economists are clamouring for AMCON to buy more toxic assets from the Eligible Financial Institutions (EFIs) in view of the very high level of the non-performing loans that are worse than the 2009 experience and far above the regulatory threshold. We wish to sound a note of warning that this Committee will not; I repeat will not support any such move; at least not at a time like this in the history of our economy.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guaranty Trust Holding Company Plc Records N609.3bn Profit Before Tax in 2023

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GTCO Commemorates Listing on Nigerian Exchange - Investors King

Guaranty Trust Holding Company Plc (GTCO) has announced a strong profit before tax (PBT) of N609.3 billion for the 2023 financial year.

This represents an increase of 184.5 percent when compared to the previous year.

The audited consolidated and separate financial statements filed with the Nigerian Exchange Group and London Stock Exchange on Monday revealed market capitalization exceeded N1 trillion on the NGX to further solidify GTCO’s position as one of the top financial holding companies in Nigeria.

During the period under review, the group’s post-tax profit rose by 218.99 percent to N539.65 billion from N169.17 billion in 2022.

Key indicators such as loans and advances increased by 31.5 percent to N2.48 trillion, while deposits grew by 63.7 percent to N7.55 trillion.

The group’s total assets and shareholders’ funds closed at N9.7 trillion and N1.5 trillion, respectively.

Despite the challenging economic environment, GTCO maintained a strong capital adequacy ratio of 21.9 percent.

Also, the group sustained asset quality, with IFRS 9 Stage 3 loans improving to 4.2 percent in December 2023 from 5.2 percent in the same period of the prior year.

However, the cost of risk experienced an uptick, rising to 4.5 percent from 0.6 percent in December 2022, largely due to worsening macroeconomic factors.

Despite these challenges, GTCO’s pre-tax return on equity stood at 50.6 percent, while pre-tax return on assets was 7.6 percent. The cost-to-income ratio remained favorable at 29.1 percent.

Commenting on the financial results, Mr. Segun Agbaje, the Group Chief Executive Officer of GTCO, expressed satisfaction with the company’s performance amidst a challenging operating environment.

He attributed the strong performance to the successful implementation of the group’s business model across banking and non-banking business verticals.

“Also important to our success is our relentless obsession with innovation and offering great customer experiences as demonstrated by the successful redesign and upgrade of our mobile banking application, GTWorld,” he stated.

“In a landscape characterised by evolving regulatory reforms, global uncertainties, and heightened competition, we have continued to leverage our inherent strengths and capabilities to unlock significant value, creating more opportunities for the businesses and individuals we serve.

In line with its commitment to shareholders, GTCO announced a final dividend of N2.70k, bringing the total dividend for 2023 to N3.20k.

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Tony Elumelu Breaks Fast with President Tinubu, Advocates for Private Sector-Led Growth

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Tony Elumelu

Renowned entrepreneur and philanthropist Tony O. Elumelu recently joined President Bola Ahmed Tinubu for an Iftar ceremony at the Presidential Villa in Abuja.

The event, held during the holy month of Ramadan, underscored the importance of collaboration and private sector engagement in driving economic growth and development.

During the gathering, President Tinubu emphasized the pivotal role of the private sector as the primary driver of the economy.

He highlighted the essential link between a flourishing private sector and overall economic prosperity, stressing that without a thriving private sector, sustainable growth, job creation, and development would remain elusive.

Elumelu, Chairman of Heirs Holdings and a staunch advocate for Africapitalism – a philosophy promoting private sector-led development and social responsibility in Africa – echoed President Tinubu’s sentiments.

He reiterated the significance of Africapitalism in accelerating Africa’s growth trajectory and fostering shared prosperity across the continent.

The Iftar ceremony served as a platform for dialogue and collaboration, bringing together influential leaders from various sectors to discuss strategies for advancing Nigeria’s economic agenda.

Elumelu reaffirmed his unwavering support for President Tinubu’s transformative vision, emphasizing the need for collective action to realize Nigeria’s full potential.

As Chairman of Heirs Holdings, Elumelu emphasized the importance of collaboration and partnership in driving positive change.

He highlighted the critical role of the private sector in complementing government efforts and driving inclusive growth initiatives that benefit all segments of society.

Elumelu’s commitment to Nigeria’s development and his advocacy for private sector-led growth have been evident throughout his career. Through Heirs Holdings and his philanthropic initiatives, he has championed entrepreneurship, innovation, and sustainable development as catalysts for economic transformation.

In closing, Elumelu expressed confidence in Nigeria’s ability to overcome challenges and achieve its aspirations for prosperity.

He reiterated his belief in the spirit of resilience and determination that defines the Nigerian people, emphasizing the importance of unity and collaboration in realizing the country’s collective vision.

The Iftar ceremony at the Presidential Villa symbolized a shared commitment to Nigeria’s future and underscored the critical role of collaboration, private sector engagement, and visionary leadership in driving sustainable development and prosperity for all.

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Merger and Acquisition

Nigerian Exchange Group Plc Acquires 5% Stake in Ethiopian Securities Exchange

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Nigerian Exchange Limited - Investors King

Nigerian Exchange Group Plc (NGX) has announced the acquisition of a 5% stake in the Ethiopian Securities Exchange (ESX).

The investment marks a significant milestone for NGX as it seeks to bolster its capital-market activities in East Africa and beyond.

The Lagos-based NGX, formerly known as the Nigerian Stock Exchange, revealed that it participated in a capital-raising exercise alongside institutional investors such as FSD Africa and Trade and Development Bank Group.

While the exact amount of NGX’s investment remains undisclosed, the company indicated that the percentage shareholding could potentially increase to 10% pending approval by NGX’s board.

NGX’s decision to invest in ESX aligns with its broader strategic objectives of facilitating cross-border investment flows, enhancing liquidity, and promoting economic development across the continent.

Temi Popoola, Chief Executive Officer of NGX, emphasized the significance of strategic partnerships and investments in driving growth and fostering collaboration within the African capital markets landscape.

The move comes as NGX transitions from a mutual company owned by stockbrokers to an organization held by shareholders. In 2021, NGX listed its shares on the NGX All Share Index, a move aimed at enhancing access to funding and expanding its capital-market operations both domestically and internationally.

Commenting on the investment in ESX, NGX highlighted its confidence in the potential of Ethiopia’s rapidly growing economy and capital market. By acquiring a stake in ESX, NGX seeks to leverage its expertise and resources to contribute to the development of Ethiopia’s financial sector while also tapping into new growth opportunities.

Following the capitalization of ESX, the Ethiopian government retains a 25% shareholding in the exchange. NGX’s investment not only strengthens its presence in East Africa but also underscores its commitment to fostering collaboration and partnerships across the African continent.

As part of the investment agreement, Temi Popoola, NGX’s CEO, is set to join ESX’s board, further solidifying the ties between the two exchanges.

This move is expected to facilitate greater collaboration and knowledge sharing, ultimately benefiting investors and market participants in both Nigeria and Ethiopia.

With NGX’s acquisition of a stake in ESX, the African capital markets landscape stands to witness increased integration and collaboration, paving the way for enhanced liquidity, deeper market penetration, and accelerated economic growth across the continent.

As NGX continues to expand its reach and influence, its investment in ESX marks a significant step forward in its journey towards becoming a leading player in the African financial ecosystem.

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