AMCON determined to recover N5.5trn from 350 obligors
Asset Management Corporation of Nigeria (AMCON) is determined to recover N5.5 trillion from 350 Nigerians who owe the corporation, Ahmed Kuru, chief executive and managing director of AMCON, says.
“Only 350 obligors, out of the 12,000, account for more than 80 percent of the N5.5 trillion. That is why it is very sad and for us at AMCON, they must pay back this money,” Kuru promised at the breakfast meeting organised by thenigerian-americanchamber of Commerce (NACC) in Lagos.
He said the corporation
initially invested N320 billion to restructure a number of businesses but only recovered about 5 percentofthemoneyduetoglobal economic crisis and poor attitude of owners of the business owners.
The corporation is no longer interested in reviving businesses as the Act establishing it only makes provision for take-over, he said.
He, however, disclosed that AMCON was working with the judicial arm of government to go into alternative conflict resolutions such as arbitration and mediation, as the best solution to defaults was to go back to the Failed Bank Act, which held operators responsible.
“If there is any letdown on credit discipline, somebody has to be responsible,” he said.
“There is an abuse and noncompliance of the credit policy approved by the banks themselves,” he regretted.
According to Kuru, he does not support extending the lifespan of AMCON beyond 2014, as doing that would encourage indiscipline, adding that the corporation has saved jobs in excess of 15,000 in the banking sector and provided liquidity for those banks because they were not in the position to lend money.
“Out of the 12,000 accounts, we have restructured more than 3,000 and we have able to get over 1,000 obligors out of the positions they were before,” he stated.
He advocated for putting depositors into consideration while setting up another intervention scheme like AMCON in the future.
“During the global financial crisis in 2009, the Non Performing Loans (NPLS) rose to almost an excess of N2.6 trillion while the national budget was less than N1 trillion. The banks that were bad accounted for almost 80 percent of the total NPLS in the industry at that time.
“The ratio of the NPL to the total loan was more than 60 percent and the regulatory threshold was supposed to be five percent and because of that most banks were not able to borrow and with no liquidity to support their operations. AMCON purchased more than 12,000 loans from 23, paying N1.7 trillion to purchase loans worth N3.3 trillion. AMCON also provided N2.2 trillion to eight banks as financial accommodation to bring their net book value to zero,” he recalled.
Oluwatoyin Akomolafe, president, Nigerian-american Chamber of Commerce, said given the current circumstances, and particularly with regard to the national economy, the issue of financial system stability had moved into the focus of public attention, adding that sound financial and reporting frameworks are essential in policy objectives.
“Despite the fact that the global financial system is edging toward greater stability, governments must deal with differing regional and national needs. The same reason is why some nations are trying to discontinue unconventional monetary policies installed to cultivate recovery, while others are expanding their scope and scale,” he stated.