The Central Bank has said that work is going on between regulators and operators for the smooth running of the Asset Management Company (AMCON), just as legislative process is progressing too, said Mohammed Abdullahi, the bank’s spokesperson. This is coming shortly after confirmation hearing by the Senate for the corporation board members.

Mr. Abdullahi said that even without the constitution of the board management of the company, work is going on and a lot have been achieved in the area of confirming and verifying non performing loans, discussions on parametres for the non performing loans of the rescued banks to be taken over or absorbed, and other issues that are crucial for the initial take off of AMCON.

“Like you are aware, the AMCON bill has been passed by the National Assembly a couple of months ago and the Central Bank, together with the federal Ministry of Finance, have worked on the nomination of the leadership of AMCON, which has been passed to the president, and the president has passed the nominees to the National Assembly to screen,” he added.

“The latest development we got on Tuesday was the screening of the nominees by the committee set up by the Senate and based on the information available to us, they have scaled through. So what remains now is for the committee to submit the report to the Senate and then as soon as the approval is granted, they could now be sworn-in to take over their respective offices,” Mr. Abdullahi said.

Experts still hopeful

Experts said the steady progress of AMCON, a resolution trust vehicle primed to purchase toxic assets from banks, will provide the basis for any meaningful merger and acquisition talks and the eventual re-consolidation of the Nigerian banking sector.

Renaissance Capital, an investment bank, said the bill will bear heavily on the outlook of the equity market and the Nigerian economy at large.

“We believe that a certain level of confidence will be restored in the Nigerian financial system following this new development,” it said.

As stated in the AMCON Bill 2010, its objectives are to assist eligible financial institutions to efficiently dispose of eligible bank assets, in accordance with provisions of the Act; and obtain the best achievable financial returns on eligible bank assets or other assets acquired by it in pursuance of the provisions of the Act.

The move to create an Asset Management Corporation was imminent, following shocking revelations by the Central Bank special audit of toxic assets estimated at over N2.0 trillion in the banks’ books resulting in startling levels of loan loss provisions on account of stock market losses, oil trading, and real estate.

In July, President Goodluck Jonathan signed into law legislation creating the company. With bad loans off their books, banks are more likely to resume lending in an economy where credit has been tight since last year’s bail-out of nine undercapitalised lenders.