How 10 Banks Spent N377.85bn on AMCON, NDIC Expenses in Q1 2025

Kayode Tokede

It has emerged that a total of 10 leading banks in Nigeria spent an estimated N377.85 billion on Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) expenses in first quarter (Q1) of 2025, representing an increase of 34.6per cent from N280.67 billion declared in first quarter of 2024.

This is according to the banks’ unaudited results for the first quarter ended March 2025 published on the Nigerian Exchange Limited (NGX).

The 10 banks according to THISDAY checks are: First Holdco Plc, Zenith Bank Plc, Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa Plc (UBA), and Access Holdings Plc.

Others include: Fidelity Bank Plc, Wema Bank Plc, Stanbic IBTC Holdings Plc, Sterling Financial Holdings Company Plc and FCMB Group Plc.

A breakdown of the banks’ results showed that AMCON levy in Q1 2025 stood at N283.85 billion, about 28per cent high when compared to N221.2 billion in Q1 2024, while Deposit Insurance Premium moved from N59.5billion in Q1 2025, up by 58 per cent to N93.99 billion reported in Q1 2024.

Cumulatively, the 10 banks declared N1.58 trillion as profit before tax, representing an increase of 0.36 per cent from N1.51 trillion in 2023.

Banking sector resolution cost represents the corporation levy, which is applicable on the total balance sheet size of a bank. The current applicable rate based on AMCON Act of 2015 is 0.5per cent of total assets plus total off balance sheet assets.

Owing to the importance of the financial services sector, involving public funds, there is a need for buffers to protect public funds in case of bank failure or liquidation, hence, the need for deposit insurance.

Deposit insurance and AMCON levy are part of layers put in place to protect public funds and ensure the stability of the banking sector.

Deposit Insurance Premium is a statutory payment by deposit-taking banks that ensures that NDIC as an insurer guarantees the payment of deposits up to the maximum limit (Now N5 million) in accordance with its statute in the event of failure of an insured financial institution.

Typically, banks with the largest deposits pay the most premium to NDIC in terms of absolute numbers. However, some banks pay higher relative to their deposits based on a pricing mechanism.

THISDAY analysis revealed that Zenith Bank paid the highest AMCON levy in Q1 2025, while Access Holdings, according to the unaudited result and accounts recorded the highest Deposit Insurance Premium in the period under review. 

Zenith Bank, with a total assets of N32.4 trillion as of March 2025, paid AMCON levy of N71.92 billion, in Q1 2025, up by 56 per cent from N46.22 billion reported in Q1 2024.  The lender also paid NDIC Insurance Premium of N16.68 billion in Q1 2025, representing an increase of 97 per cent from N8.49 billion reported in Q1 2024.

Access Holdings paid NDIC an estimated N18.24 billion in Q1 2025, about 87 per cent from N9.7 billion declared in Q1 2024. 

Also, Access Holdings declared AMCON levy of N38.95 billion in Q1 2025, about 30.58 per cent decline from N56.11 billion paid in Q1 2024. 

The 30.58 per cent drop in AMCON levy in Q1 2025 is on the backdrop of N38.99 trillion total assets declared as of March 2025, down by 5.8per cent when compared to N41.4 trillion reported in 2024 full financial year.

AMCON was established in 2010 in a bid to stabilise the Nigerian banking system by efficiently resolving the non-performing loan assets of the banks in the economy.

Currently, it is being funded by a combination of loan recoveries, contributions from the Central Bank of Nigeria (CBN), sales of pledged assets, and a sinking fund assessed to the banks.

The federal government established AMCON with a 10-year mandate in response to the mounting bad loans and the requirement to prevent the banking sectorcollapse. The AMCON Act 2019 (Amended) gives the corporation broader authority to pursue obligors for unpaid debts.

Additionally, helping eligible financial institutions efficiently dispose of eligible bank assets in compliance with the Act’s rules is one of the key objectives of the Act.

Initially, banks were required to pay 0.3per cent of all assets into the sinking fund. In 2013, it was raised to 0.5per cent  of total assets (and 0.3per cent of contingent liabilities).

Stakeholders have expressed mixed feelings over 0.5 per cent AMCON levy on banks.

The Investment Banker & Stockbroker, Mr. Tajudeen Olayinka in a chat with THISDAY had said the operations of AMCON is long overdue.

“The fact that AMCON continues to place yearly levies on banks in the country in an endless manner, is an indication that AMCON is unable to pay its debts, and that its birth as a failure resolution option was unnecessary or absolutely misplaced at the time it was conceived.

“Those failed banks could have been better managed with more robust failure resolution options outside AMCON arrangement. And I blame the governor of CBN at that time, Sanusi Lamido Sanusi, for the error,” Olayinka explained.

President Pragmatic Shareholders Association, Mrs. Bisi Bakare, also backed Olayinka’s view stressing that AMCON is no longer needed.

“Even those debts that have been taken over by AMCON, what has been the level of recovery? There continuing stay is more like a waste conduct pipe that has consequences on shareholders’ fund in the Nigeria’s banking sector,” Bakare echoed.

Speaking from a different perspective, the MD/CEO, Globalview Capital Limited, Mr. ArunaKebira, said, “AMCON was established and was given powers to operate in its jurisdiction. Its life span would have also been determined by the laws that established it. It being around continuously is a function of the operational ambit and the powers vested on it by law.It will take the FGN to determine whether it has overstayed its welcome, even if the citizens are crying blue murder.”

In addition, Vice President, Highcap Securities, Mr. David Adonri said, “AMCON was set up as a bad bank to mop up the Non-Performing Loan (NPL) of banks. In collaboration with banks, AMCON created a Sinking Fund into which banks were to contribute.

“AMCON issued zero coupon bonds to securitize the NPLs which it hoped to redeem from the Sinking Fund. It is therefore likely that the so called AMCON levies on banks paid last year and previous years are indeed their annual contributions to the Sinking Fund they agreed with AMCON to set up to clean up their books.”