AMCON’s Loss Widens in 2015 on Asset Write-downs

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The Asset Management Corporation of Nigeria (AMCON) on Thuesday posted a 2015 loss of N304.35 billion ($982million), wider than last year’s loss of N275.49 billion, after it wrote-down the value of collateral recovered from its purchase of bad loans.

The Executive Director, Aminu Ismail, told Reuters that the 2015 loss was also partly due to interest paid on a N3.8 trillion bond due to the central bank which it used to acquire the bad loans.

AMCON was set up in 2010 to absorb bad loans as part of resolving a financial crisis in Africa’s biggest economy. Ismail said N1.26 trillion in non-performing loans (NPLs) out of a total of N3.7 trillion had been settled.

Ismail said NPL ratios jumped to 93 per cent of its total bad loans in 2015, up from 57 per cent a year earlier, as the weak economy impacted debt repayment.

On the banking side, NPLs had started building up again. Nigeria’s main rating agency, Agusto & Co, expects NPLs to jump to 12.5 per cent of total loans this year, up from the central bank’s target level of five per cent at the end of last year.

Ismail said AMCON stopped buying NPLs two years ago and was now focused on recoveries to enable it to wind-down its activity by 2023, when its debt to the central bank matures.

He said the decision to acquire NPLs would be that of the government and the central bank.
Ismail said AMCON had received interest from buyers looking to acquire nationalised lender Keystone Bank after rival Sterling Bank dropped out.
He said the corporation will make an announcement on the sale process within four-week.