AMCON Recovers N740bn from Debtors, Trims Losses to N16bn
The Asset Management Corporation of Nigeria (AMCON) has put the total amount of recovered debt as of the end of 2017 at N740 billion. This is just as the corporation’s 2017 results showed that its loss position reduced significantly by 90 per cent to N16.41 billion in 2017, compared with the N164.94 billion recorded the previous year.
The Chief Executive Officer of AMCON, Mr. Ahmed Kuru disclosed this during an interactive session with journalists in Lagos yesterday.
Kuru pointed out that the corporation currently was currently in possession of a lot real estate and some other forms of assets.
He said: “We have disposed some financial assets, which also included three banks. We are in the process of divesting our interest in Peugeot Automobile Nigeria (PAN).
“This is in addition to quite a number of small businesses that we had intervened and disposed.”
He put the value of AMCON’s intervention in the agriculture sector at about N1.7 trillion.
“The structure of AMCON at conception was that, there was the assumption that those loans that were purchased would be restructured and liquidity provided so that new life would be given to some of those businesses.
“Unfortunately, a substantial part of businesses that were restructured and funds injected in the past, the performance level is less than 10 per cent. “Like I said earlier, there was the assumption that if you transfer the loans from the banks to an asset management corporation, you will be able to restructure.
“But again, we forgot that some of those facilities were bad in the books of some of those financial institutions,” he explained.
AMCON’s financial statement also showed that its gross earnings grew by 22.6 per cent, to N342 billion in the year under review, from N279 billion, just as its total assets reduced to N822 billion in 2017, from N1.131 trillion. The corporation’s interest revenue increased by 21 per cent to N42.56 billion, while its net trading gain surged to N22.86 billion.
The results showed that inflow from the banking sector resolution cost trust fund dominated the gross revenue at 62 per cent, while the corporation’s revenue from the aviation sector declined by 51 per cent due to a slowdown in activities in the sector in 2017.
Commenting on the results, the AMCON boss said: “As we all know, AMCON was not set up to make profit. We are not a profit-making organisation. Basically, we are a resolution agency.
“The corporation has done very well in terms of what its mandate was, which is to bring financial stability.
“We have started seeing a situation where our excess loss position is gradually reducing. So far, we have recovered an average of about 37 per cent of what we were supposed to recover.”
Furthermore, he argued that in other countries where asset management corporation are also operational, the highest such institutions have done in terms of recovery is usually about 50 per cent.
“So, if you gauge what we have done against what is obtainable internationally, you will see we are doing better. For AMCON to be performing, the economy must also be growing.
“If the economy is doing very well, some of those businesses that are defaulting will also be doing very well. If the economy is not doing very well, then those underlying businesses would also not be doing very well,” Kuru explained.
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