AMCON declares N352bn losses in 2016

The Asset Management Corporation of Nigeria (AMCON), has declared losses amounting to N352bn for the year 2016.

The management of the ‘bad bank’ made this known over the weekend, stressing that the group losses of N352 billion at end of December 2016, marked a N57 billion reduction from N295 billion recorded at the end of December 2015.

While Deposit Money Banks (DMBs) contributed a total of N136 billion to the AMCON sinking fund, during the 2016 financial year, the corporation disclosed that it has recovered N134 billion loans in the year under review.

Speaking on the performance of the company in 2016, the Managing Director of AMCON, Ahmed Kuru said: “In 2016, our total recovery was N134 billion. Not all of them are cash. N86.9 billion came from cash collection and some debtors that felt that they could settle some outstanding obligation through forfeiture of their assets.”

“So, assets forfeiture amounted to about N30.4 billion, while N8 billion came from sale of properties,” he said.

The AMCON boss said in spite of the economic challenges, the corporation was able to improve on its performance by reducing its group losses for the year.

Also, the Chief Financial Officer, AMCON, Olugbenga Ataiyero, who gave a breakdown of the account, reemphasized that the group losses were reduced by N57, adding that for the AMCON stand-alone financial statement, the corporation made a lot of improvement from last year.

“Last year we closed at N310 billion losses, this year we were able to manage it down to N251 billion losses. We had a very appreciable improvement in terms of main operation alone,” he said.

“But we had the burden of subsidiaries that we had to add to our own figures. The position from last year doing a comparison of our performance for last year, we went a little bit back. For 2016, we closed at N315 billion for the year while in 2015 it was N295 billion.

“So while on the part of AMCON there was an appreciable improvement in terms of our numbers, the losses came down drastically, by almost about N59 billion but for the group numbers.”

He also disclosed that during the 2016 financial year, banks contributed N136 billion to the AMCON sinking fund, adding that the banks have so far contributed N931 billion to the sinking fund since inception

Ataiyero however lamented that the projection was that banks’ contribution were going to grow at 20 per cent, which never came to pass.

“In 2016, we had envisaged that the banks would have contributed about N288 billion, but they actually contributed only N136 billion.

“So, that was enough for us to pay down the principal. What we did was just to service the interest of our loan from the CBN. We pray that the contribution to the sinking fund would improve and then our losses would begin to go down,” he said.

Mr Kuru listed other obstacles the corporation faced in its loan recovery efforts to include the refusal of certain obligors to pay back, numerous court cases that take many years for the parties to resolve, and difficulties in disposing seized assets.

The AMCON chief lamented that the job of debt recovery is a tasking job.

“There are quite a lot of challenges we are facing in debt recovery,” he said.

“We are not under any illusion that it is easy to recover bad loans. Loan recovery is a very unpleasant job,” he added.