AMCON Recovers N759bn Says CBN

• AMCON Recovers N759bn Says CBN

A total of N759 billion has been recovered by the Asset Management Corporation of Nigeria (AMCON) as of December 2018.

A recent report by the Central Bank of Nigeria (CBN) also revealed that some debtors forfeited properties valued at N263.73 billion.

Giving a breakdown, the apex bank said there was a cash recovery of N89.97 billion for the 2018 financial year from asset sales and credit repayments, bringing its total recoveries from since the birth of AMCON  (2010) to N759.05 billion in 2018.

The recoveries consist of cash, N366.85 billion; shares forfeiture, N128.47 billion; and property forfeiture, N263.73 billion, according to the report.

The carrying value of AMCON’s liabilities, the CBN said increased from N4.53 trillion at the end of June 2018 to N5.43 trillion as of December 2018, which was as a result of the corporation’s investment of N898.45 billion in Polaris Bank Ltd.

The CBN had withdrawn the operating licence of the defunct Skye Bank Plc in September 2018 due to its declining health and formulated Polaris Bank to take over its assets and liabilities.

The tactics, according to the apex bank, was for AMCON to capitalise the Polaris bank by sourcing for investors to buy out the corporation.

The carrying value of AMCON assets, net of impairment, increased from N731.55bn at the end of June 2018 to N769.87bn as of December 2018, the CBN report says.

“AMCON’s N5.43tn liabilities were projected to be covered by the Banking Sector Resolution Cost Trust Fund and the corporation’s internal credit recoveries and asset sales.

“Contributions to the BSRCTF by the CBN and 15 participating banks for 2018 were valued at N228.28bn. The recoveries generated by AMCON as well as the contributions to the BSRCTF were used to repay the corporation’s debt obligations, which fell due in December 2018.”

According to the CBN, there was an improvement in banks’ non-performing loans ratio from 12.45 per cent at the end of June 2018 to 11.67 per cent at the end of December 2018.

It further noted that the total NPLs stood at N1.79 trillion at the end of December 2018, compared with N1.94 trillion at the end of June 2018.

“The moderation in the NPLs reflected loan write-offs, the impact of the debt recovery strategies employed by banks and the gradual improvement in economic conditions, leading to increased repayment by obligors.”

In the second quarter of 2018,  seven banks were categorised as Domestic Systemically Important Banks.

The banks were selected based on the D-SIB supervisory framework, given their size, interconnectedness, substitutability and complexity.

“The D-SIBs accounted for 63.80 per cent of the industry’s total assets of N35.10tn and 65.23 per cent of the industry’s total deposit of N21.73tn as well as 66 per cent of the industry’s total loans of N15.34tn.

“The examination revealed that the D-SIBs were largely in compliance with the regulatory requirements, including capital adequacy and liquidity ratios. The average capital adequacy ratio for the D-SIBs stood at 19.82 per cent, while liquidity ratio stood at 46.29 per cent,” the CBN added.