The Asset Management Corporation of Nigeria recorded a decline of N437bn in its total assets in the 2023 financial period.
The financial performance which was released by the Corporation showed that total assets dropped by 28.8 per cent to N1.076tn in 2023 from the N1.513tn which it was in 2022.
The Corporation had been under pressure in recent times to recover the toxic loans inherited from banks that were liquidated.
The nation’s banking sector ran into a financial crisis in 2008 and 2009 – a problem that was partly triggered by the global financial crisis.
AMCON’s seed investment was secured from the capital market through the Central Bank. Subsequently, its operations were funded with levies imposed on commercial banks.
The corporation is funded with 0.5 per cent charge on banks’ total assets on and off-balance sheet items. The levy is a statutory charge imposed by the CBN on all banks operating in the country.
Experts have said that with the performances of companies indebted to the Asset Management Corporation of Nigeria (AMCON) falling below par, even as they struggle to find their feet amid endless litigations, the corporation may lose some of the money spent repurchasing toxic assets from troubled banks and other entities.
This comes as values of the companies taken over by the corporation have been eroded by challenges, ranging from poor management to a harsh economic environment. According to experts, some of the companies have become burden to AMCON with the possibility of turning them into profitable ventures becoming increasingly difficult.
This came to the fore recently when members of the Senate Committee on Banking, Insurance and Other Financial Institutions demanded the dissolution of AMCON over the failure to recover liabilities totalling N5tn.
The lawmakers made the demand when the immediate Managing Director of AMCON, Ahmed Kuru, appeared before it to defend the agency’s budgetary allocation for the 2024 fiscal year.
Those who called for the dissolution of AMCON are Sani Musa (APC Niger East), Jimoh Ibrahim (APC, Ondo South), Adamu Aliero (PDP, Kebbi Central) and Ifeanyi Ubah (APC, Anambra South).
Musa, who is also chairman of the senate committee on finance, expressed dissatisfaction with the agency’s performance.
“Most of the loans were owed by individual companies which were never sanctioned and at the end of the day, the same company would go back to buy back their assets that AMCON had hitherto taken over. Are we going to continue like this?
“It is not only about defending the budget, it is about seeing the effect of the appropriation. We need to know whether it is working. Or are we just creating a job for those we can’t protect?
“Will it not be better to scrap AMCON since it seems to have lost its statutory mandate?” the senator asked.
But in a statement signed by AMCON’s spokesman, Jude Nwauzor and made available to NewsNGR, the Corporation said despite challenging macroeconomic conditions coupled with economic headwinds, it achieved a remarkable triple-digit growth of 202 per cent from N34.730bn in the previous year to N108.433bn in 2023.
A breakdown of the result showed that AMCON, which is currently led by Mr Gbenga Alade as Managing Director/Chief Executive Officer achieved a Year-on-Year growth in profit of 212 per cent from N34.730bn in the financial year, which ended on December 31, 2022, to N108.433bn in the period ended December 31, 2023.
The report disclosed that fair valuation gains on Eligible Bank Assets (EBAs) increased to N40.9bn in 2023 from a loss of N187.9bn in 2022.
It added that equity portfolio recorded 82 per cent growth in 2023 amounting to N43bn as compared with N7.9bn in 2022. The significant trading gains is as result of an improved performance in the stock market.
During the period, the Corporation achieved a reduction in total liabilities, from N6.282tn in 2022 to N5.739tn in 2023, primarily due to repayments of the N500bn Central Bank of Nigeria (CBN) loan.