AMCON TO BUY BAD DEBTS IN EXCESS OF 5% LIMIT

Asset Management Corporation of Nigeria (AMCON) said it would buy the non-performing loans of banks that in excess of the five per cent regulatory maximum limit for non-performing loans.

Managing Director/Chief executive of the company, Mr. Mustafa Chike-Obi said this adding that this include non-performing loans that poses systemic risk to the banking industry.

Buy Debts of Nigerian Banks to Avert Systemic Risk

Banks with such loans will need to ask the Central Bank of Nigeria to authorize AMCON to buy the debts, Chike-Obi said today in a presentation at an investment conference organized by Renaissance Capital in the commercial capital, Lagos.

AMCON was established to purchase non-performing loans of banks and thereby enhance the amount of funds available to the banks for on-lending to economic activities.

For this purpose the Company issued N1.7 trillion worth of bonds in exchange for the non-performing loans of 21 banks.

This cover all the bad debts of eight rescued banks and the margin loans of 13 non-rescued banks. The rescued banks are Afribank, Bank PHB, Oceanic Bank, Union Bank, Intercontinental Bank, Finbank, Equitorial Trust Bank and Spring Bank.

The non-rescued banks are Wema Bank, Bank of the North, UBA, First Bank, Sterling Bank, Skye Bank, Guaranty Trust Bank, Zenith Bank, Access Bank, Ecobank, Fidelity Bank, and Diamond Bank.