The board of the Assets Management Corporation of Nigeria (AMCON) has stated that it is confronted with a N3 trillion toxic assets from 10 out of the 24 banks in the country.

Aliyu Belgore, chairman – designate of AMCON, told a Senate committee that 10 of the Central Bank of Nigeria (CBN) managed banks were reeling under N3 trillion toxic assets yesterday in Abuja.

Recall that the Federal Government had set AMCON to absorb the toxic assets of the banks which were said to be financially weak and the management of eight subsequently removed by the CBN in 2009. The CBN had injected over N600 billion into the eight banks and requested that Wema Bank and Unity Bank should recapitalise. New managements were also appointed by the CBN for the banks.


This disclosure would suggest that the CBN figure for the toxic assets of the banks affected was N2 trillion. This would suggest a deteriorating condition in their asset quality, rather than an improvement.This disclosure flies in the face of the claims of impressive recovery by the CBN, one made as recent as the press release issued yesterday with regards to Wema Bank Plc and Unity bank Plc.


According to Chairman-designate Belgore, “AMCON is a corporation that will provide succour and relief to banks. A lot of the banks, particularly 10 out of the 24 banks, have non-performing loans to the tune of N3 trillion; this is quite massive as the huge amount has suffocated the banks”.


He added – “Ninety percent of the banks are not lending and the economy is frustrated unless there is infusion of money. The balance sheets of the banks which reflect negative capital must be cleaned and come down to zero level.”


On the proposed sale of the troubled banks, Belgore noted that “most of the investors have withdrawn as a result of poor state of the banks, just as he warned that any fresh money injected into the troubled banks will be swallowed”


Before embarking on the task, the chairman-designate insisted that AMCON must evaluate all security risks of the weak banks with a view to ascertaining their potency (level of return from the bail out).


Mustapha Chike-Obi, AMCON managing director-designate said “What happened in Nigeria was not unusual and the decision taken was the best way to resolve the crisis.”

Chike-Obi, who reiterated the commitment of the AMCON board nominees to make the corporation a model in the world, called for the cooperation of all Nigerians, including the legislature and the executive in order to achieve the objective for which the corporation was set up. Chike-Obi maintained that the corporation has the required legal backing to recover bad loans, receive and liquidate as well as seize assets of borrowers who are unable to pay.

Source: Agency reports and additional reporting from BusinessDay