- Resolution cost fund proposed
- 50% non-performing loans recovered
- N1trillion debt paid in record time
In what looks unprecedented in the history of debt recovery and asset management in the banking industry, the Asset Management of Nigeria AMCON has said it has recovered 50 percent of banks’ non-performing loans.
Speaking today at the public hearing of the Senate Committee on Banking, Insurance and other Financial Institutions organized to amend the Asset Management Corporation of Nigeria Act, 2014, the Managing Director of AMCON, Mustafa Chike-Obi disclosed that “these debts were debts that the banks had given up on. Some of those debts were between seven and ten years old”.
Chike-Obi added that, “the organization in December 2013, paid off a total of N1trillion of its debts as well ahead of schedule. We also plan to pay off an additional N1trillion of our debts well ahead of schedule. We also plan to pay off an additional N1trillion of debts in October 2014, which will reduce AMCON’s indebtedness by 30 per cent in the first four years of operation”.
The Asset Management Corporation Act, 2014 Amendment Bill currently before the National Assembly when amended, shall create a Resolution Cost fund annually which when operative, becomes as proposed in section 65 and the commercial banks; where AMCON’s debt obligations arising from debt securities issued are not met by the Corporation, from the proceeds from the sale of acquired assets from the banks.
In other words, the incidence of bank failures would be borne by banks rather than by the tax payer.