Shareholders fume over AMCON’s ‘excessive levies’ on commercial banks

Apparently irked by the levies imposed on commercial banks to sustain the Asset Management Corporation of Nigeria (AMCON) and the dwindling returns on investments, shareholders have urged the Federal Government to tighten the noose on debtors and urgently free the banks from AMCON operational burden.

The shareholders under the aegis of Independent Association of Nigeria (ISAN) expressed the concern on the backdrop of huge cost to banks. They argued that the corporation has demonstrated its inability to successfully resolve toxic debts after 12 years of operations.

The Coordinator Emeritus, ISAN, Sunny Nwosu, while addressing journalists in Lagos at the weekend, said shareholders are concerned with the losses reported by AMCON despite collecting huge levies from banks and having challenges in selling recovered assets from debtors.

Nwosu lamented the poor performance of the corporation, adding that the agency recovered only a paltry N1.4 trillion since inception with data showing that non-performing loans (NPL) have again increased by more than 150 per cent.

He noted that at the commencement of its operations, the agency purchased 12,743 NPLs or eligible bank assets (EBAs) valued at N3.8 trillion from 22 eligible financial institutions (EFIs) for N1.8 trillion and added that the corporation earned about N327.6 billion from 0.5 per cent charges on banks’ total assets on and off-balance sheet items imposed on nine banks between 2020 and 2021.

“AMCON’s levies on commercial banks increased from N146.9 billion in 2020 to N180.67 billion in 2021. As part of the quick intervention in the banking sector bad debts, by Central Bank of Nigeria (CBN) through AMCON, the debt recovery agency equally received N125.9 billion from 12 commercial banks listed on the Nigerian Exchange Limited (NGX) as part of the sector’s resolution funds in the first quarter of 2022.

According to him, AMCON bank charges increased by 29.5 per cent during the same period, from N97.18 billion paid in the corresponding period of 2021 to N125.9 billion in the first quarter of 2022.

“After 12 years of the agency’s operations, Nigerian shareholders have come to the conclusion that the funding of AMCON with levies from commercial banks cannot be continued because of its negative impact on returns on investment and the incapacitation of commercial banks to adequately intervene in the nation’s real sector”, Nwosu stated.

He pointed out that most commercial banks and numerous corporates indebted to AMCON currently struggle to remain afloat in the face of numerous litigations, as the corporation appears unlikely to meet its set goals.

“Our conclusion is that the corporation is on the verge of losing the Nigerian tax payers’ money spent in repurchasing critical toxic assets from troubled banks and other entities.

“As concerned domestic investors, our patriotism is not in doubt as we demand once again the complete review of AMCON to determine its relevance to the economy or totally abrogate the agency following the declining values of companies taken over by the corporation and the current national economic challenges”, he said.

He described the federal government floating of AMCON as a distraction that has prolonged the banking industry challenges, stating that their operations must stop with the huge financial bailout package given to the banks to shore up their capital base as done in most developing countries.

“Our position, like we said before, is that AMCON has overstayed its function and urged the CBN to suspend levying commercial banks. We are averse to AMCON successfully lobbying the federal government and lawmakers to extend its operations but our opinion remains that if CBN wants to sustain AMCON, it must not be through levies from the banking industry.

“In real terms AMCON’s 10 years life span has ended, the elongation of its life span amounts to playing games with taxpayer’s money and shareholders’ funds. AMCON is killing the banking industry and the entire financial services sector.

“Overall we want the federal government to tighten the noose on debtors and reject the aroma of the free funds from the banking industry levies but reflect on the negative impact of the levies on the real sector and the economy,” he advised.