Shareholders outraged at AMCON’s ‘excessive levies’ on commercial banks | The Guardian Nigeria News

Seemingly upset by levies imposed on commercial banks to prop up the Asset Management Corporation of Nigeria (AMCON) and falling investment returns, shareholders have urged the federal government to tighten the noose on debtors and urgently release banks from AMCON’s operational burden.

Shareholders under the umbrella of the Independent Association of Nigeria (ISAN) have expressed concern over the huge cost to banks. They argued that the company has demonstrated an inability to successfully resolve toxic debts after 12 years of operation.

ISAN Coordinator Emeritus Sunny Nwosu, speaking to reporters in Lagos over the weekend, said shareholders were concerned about AMCON’s reported losses despite collecting huge levies from banks and struggling to sell the recovered assets to debtors.

Nwosu lamented the poor performance of the company, adding that the agency had only recovered a measly 1.4 trillion naira since its inception, with data showing that non-performing loans (NPLs) had risen again by more. by 150%.

He noted that at the start 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 company earned about 327 naira. 6 billion fee of 0.5% on total bank assets on and off balance sheet imposed on nine banks between 2020 and 2021.

“AMCON levies on commercial banks have increased from N146.9 billion in 2020 to N180.67 billion in 2021. Bank of Nigeria (CBN) through AMCON, the debt collection agency also received N125.9 billion from 12 commercial banks listed on the Nigerian Exchange Limited (NGX) as part of industry resolution funds in the first quarter 2022.

According to him, AMCON bank charges increased by 29.5% over 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 operation of the agency, Nigerian shareholders have come to the conclusion that funding AMCON with levies from commercial banks cannot be continued due to its negative impact on investment returns and the inability of commercial banks to intervene adequately in the country’s real sector,” Nwosu said.

He pointed out that most commercial banks and many companies indebted to AMCON are currently struggling to stay afloat in the face of numerous litigations, as it seems unlikely that the company will achieve its goals.

“Our conclusion is that the company is on the verge of losing Nigerian taxpayers’ money spent buying up critical toxic assets from troubled banks and other entities.

“As concerned domestic investors, our patriotism is beyond doubt as we demand once again the full review of AMCON to determine its relevance to the economy or the total repeal of the agency following the decline in company values ​​taken up by society and to the current national economic challenges,” he said.

He described the federal government’s float of AMCON as a distraction that has prolonged challenges to the banking sector, saying their operations must cease with the huge financial bailout given to banks to shore up their capital as is done in most developing countries.

“Our position, as we have said before, is that AMCON has exceeded its duties and urged the CBN to suspend levies on commercial banks. We are opposed to AMCON successfully lobbying the federal government and lawmakers to expand its operations, but we remain of the view that if CBN is to support AMCON, it should not be done through industry levies. banking.

“In real terms, AMCON’s 10-year lifespan is over, extending its lifespan is like playing games with taxpayers’ money and shareholders’ funds. AMCON is killing the banking industry and the entire financial services industry.

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

About Ruben V. Albin

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