Showing posts with label AMCON. Show all posts
Showing posts with label AMCON. Show all posts

N4.7t debt: AMCON pays N2tr to CBN

The Asset Management Corporation of Nigeria (AMCON) has repaid N2 trillion out of its N4.7 trillion commitment to the Central Bank of Nigeria (CBN), its Managing Director/CEO Ahmed Kuru has said.

Speaking on the corporation’s focus in his new five-year term, the AMCON boss,  said the corporation has achieved achieved its first mandate of purchasing the Non-performing Loans (NPLs) and providing liquidity to the commercial banks.

In terms of recoveries, he said AMCON has made a total recovery of above N1.2 trillion, sold assets worth about N500 billion and resolved close to 5000 Eligible Bank Assets (EBSs).

“We are focused on the second and most difficult phase of recovery and restructuring of the bad loans. Recall that AMCON acquired over 12,000 NPLs worth N3.7 trillion from 22 banks and injected N2.2 trillion as financial accommodation to 10 banks to prevent systemic failure. As a result of this intervention, our current liability with CBN is around N4.7trillion while the N2 trillion had been repaid so far,” he said.

He said before AMCON was established,  the economy was in a dire straits. “There were foreign portfolio withdrawals of credit lines and investment from Nigeria; the stock market also collapsed leading to loss of about 80 per cent of its value and the banking industry crisis deepened due to poor risk management that led to increase in the Non-Performing Loans (NPLs) of the banks as a percentage of industry loans,” he said.
“At a point in 2009 NPLs as percentage of all bank loans was as high as about 37.25 per cent. I salute the courage and the wisdom of the Central Bank of Nigeria (CBN) for quickly intervening by proposing to the National Assembly the need to set up an Asset Management Corporation to stabilise the economy, which was the global trend at that time”.

Kuru said the fundamental objectives for the establishment of AMCON was to—rescue commercial banks and some underlying strategic businesses in Nigeria from the brink of collapse in the aftermath of the global financial crises of 2008 through acquisition of non-performing loans and to dispose of the underlying assets in the most profitable manner.

“AMCON also had the mandate to recapitalise the banks and to recover the debts using the various resolutions mechanisms created under the Act, which I can tell you have been executed effectively,” he said.

Also, in an attempt to focus our resources on the recovery mandate, we have identified about 6,000 loans with outstanding balances below N100 million, which constitute only 20 per cent of our current portfolio.

This portfolio has been outsourced to debt recovery agents under the Asset Management Partners (AMP) scheme, which has created huge employment opportunity for others. This has enabled the corporation to focus on fewer accounts, which make up 80 per cent of the portfolio.

“In our reckoning, if AMCON is able to resolve the nearly 2000 accounts it would have achieved more than 80 per cent of its recovery mandate. In line with our sunset period, we are tinkering with the idea of increasing the threshold of the AMP scheme to N1 billion. We have also classified 350 accounts with current exposure of over N3.2 trillion into a category referred to as Criticized Assets,” he said.

Kuru said the resolution of these accounts are considered to be germane to the success of AMCON’s recovery mandate.

“We give special attention to these accounts at top management level and develop strategies for resolving them. The largest concentration is in the energy sector, which constitutes 27 per cent. As we have always stated, one of the major challenges to AMCON’s recovery mandate is the slow pace of our judicial processes.

However, we have continued to engage with the judiciary, and we believe that there is now greater awareness about the role of AMCON amongst the Judges at the trial courts as well the Justices of the appellate courts and they have been supportive,” he added. Thenationonlineng

In Enugu: AMCON denies ordering closure of girls’ school

The Asset Management Corporation of Nigeria (AMCON) has denied ordering the closure of Providence High School, Enugu, blaming overzealous persons for locking up the gates and allegedly assaulting a male staff of the boarding school.

AMCON’s Head of Corporate Communications, Jude Nwauzor, who spoke with journalists in Enugu, said the corporation would never make enforcement in schools, religious organisations and hospitals based on their peculiar nature, stressing: “Taking possession means showing presence and placing notices of the assets in writing.”

Criticisms had trailed reports of locking the gates of the boarding school with 344 female students by officials of the corporation who were on enforcement over alleged loan of N7.6b obtained with the school’s facilities by the original owner and others some years ago.

However, six days after the premises were locked, AMCON had reopened the gates following public outcry. Nwauzor said the enforcement was based on a court order, but was not meant to close the school, harass or detain anybody.

“The story of the school was unfortunate, because AMCON never ever enforces on schools, we don’t close schools. This is not our first experience with a school, we had a school at Lekki in Lagos that is about three times the size of this school that we took over some years ago and we never closed its gates.

“We normally use Court Bailiffs to do a possession order sign on the wall, put a board on the gate and leave the school to run, because we understand the implication and reality of what the education system represents for Nigeria. AMCON also does not enforce in religious settings and hospitals and I think it is important for the media to know this,” he stated.

He disclosed that AMCON’s management and the school authority had been engaging and that when people make agreements and fail, only the courts could resolve such issues, adding that the court granted AMCON the order and the commission enforced it.

“And of course, on that first day, the Bailiff had to obey the court order because the Bailiff cannot go back to the court to tell the judge that the order he granted was not enforced. But because we understand the sensitivity of the sector, the gates were opened.

“My Managing Director is a family man, who also has children in schools. He can’t possibly approve of closing a school with hundreds of students. So, he never said anybody should shut down the school or detain the 344 students. As such, the report was not true because the students did not know about the enforcement,” he added.

He stated that AMCON’s intention was not to lock the school, but to show signs of possession and walk away, stressing: “AMCON does not work in court and its staff did not go to Enugu to execute the order, but the court bailiffs.” Theguardianng
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