Ten deposit money banks contributed N1.66 trillion to the Assets Management Corporation of Nigeria (AMCON) sinking fund, also known as the Banking Sector Resolution Cost Trust Fund (BSRCTF), in a span of ten years, specifically from 2014 to 2023.
Founded in July 2010 with the goal of rescuing the balance sheets of banks that were about to fail due to non-performing loans (NPLs), AMCON was initially intended to last for ten years. Ten national commercial banks that are listed on the Nigeria Exchange have contributed N1.663 trillion to AMCON's sinking fund as the company approaches its 15th anniversary.
The N1.5 trillion sinking fund established by AMCON was to be funded by the Central Bank of Nigeria's and the nation's financial institutions' contributions to offset NPL losses.
A Memorandum of Understanding (MoU) signed by twenty-four Nigerian banks established the Banking Sector Resolution Cost Fund (RCF) in 2011. At first, 30 basis points of the assets of qualifying financial institutions had to be contributed annually.
The ten-year financial statements of FBN Holdings, Zenith Bank, United Bank for Africa (UBA), Access Corporation, Guaranty Trust Bank, Fidelity Bank, Stanbic IBTC Holdings, FCMB Holdings, and Sterling Holdings were used to calculate the N1.66 trillion amount.
FBN Holdings made the largest payment of these ten institutions, totaling more than N359.66 billion between 2014 and 2023. Access Corporation and Zenith Bank came in second and third, respectively.
They contributed N289.05 billion and N299.14 billion throughout that time.
Within the 10-year period, UBA and GTCO contributed N205.235 billion and N166.087 billion, respectively, to the Sinking Fund, while Fidelity Bank contributed N111.805 billion. Additionally, N87.169 billion, N83.797 billion, and N61.864 billion were contributed to the sinking fund by Stanbic IBTC, FCMB, and Sterling Bank, in that order.
When this business was founded, it recognized ten banks that had system asset crises and responded by providing N736 billion in liquidity to acquire those banks' assets. As part of its operations, the corporation is authorized by the Act to establish a sinking fund, to which it contributes N50 billion annually The Central Bank of Nigeria and 0.3% of the total asset worth of all commercial banks during the corporation's useful life.
Following the purchase of FG securities with the funds from this fund, the investment's profits will be refunded to the account and divided among the participating commercial banks. A group of representatives from the participating banks oversees the fund; its membership will be rotated yearly to ensure equal participation from all participating institutions.
The Federal Government of Nigeria was advised to cease AMCON's operations in 2013 by the International Monetary Fund (IMF) management in a report to prevent further financial difficulties.
AMCON stated in its financials that company experienced triple-digit growth of 2023 saw a 202% increase in revenue from N34.730 billion to N108.433 billion. Year-over-year (YoY), its profit increased by 212% from N34.730 billion at the end of the financial year 2022 to N108.433 billion at the end of the financial year 2023.
According to the study, the fair valuation gains on Eligible Bank Assets (EBAs) experienced a rise from N187.9 billion loss in 2022 to N40.9 billion gain in 2023. In 2023, the equity portfolio experienced an 82% rise, totaling N43 billion, compared to N7.9 billion in 2022. According to AMCON, the large trading gains are the outcome of the stock market's increased performance.
The company's total liabilities were favorably reduced, from N5.739 trillion in 2023 compared to N6.282 trillion in 2022, mostly as a result of loan repayments of N500 billion from the Central Bank of Nigeria (CBN). Additionally, the Corporation met 89% of its revenue budget in 2023, with N125.2 billion in total recovered.
A breakdown of the recovery by LEADERSHIP revealed that, in spite of the difficult economic climate in the nation brought on by the removal of subsidies and the floatation of the naira, AMCON was able to collect N81.65 billion from various obligors, N17.8 billion from share sales, N15.5 billion in reinvestment income, N6 billion as proceeds from property sales, N3.8 billion in dividend income, and N0.5 billion from rental income.
Under Alade's direction, the Corporation's top management stated that AMCON is well-positioned to carry out the upward trend attained in 2023, with a focus on enhanced recoveries and effective value realization from forfeited asset sales in support of the Corporation's mission.
Comments
Post a Comment