Bridged-Banks: Preferred bidders must retain staff - AMCON

By The Citizen

The Asset Management Corporation of Nigeria, AMCON, will not sell any of the three bridged banks, Keystone Bank, Mainstreet Bank and Enterprise Bank, to a core investor who will not preserve employment, says the Managing Director/CEO, Mr. Mustafa Chike-Obi.

Chike-Obi described as false the rumour that FirstRand had expressed interest in acquiring Enterprise Bank, but later withdrew from the deal, saying that FirstRand did not at any point express interest in buying Enterprise Bank.

He noted that besides job preservation, he would also be looking for investors that would offer the most attractive price for the banks.

He stated that soon, announcement would be made on the new management of the depots AMCON took over from some of its debtors, including Zenon Oil.

Chike-Obi said: 'From my point of view, I want two things. The best price I can get and the person that will keep the most jobs. That is what I am going to be asking. If somebody offers me N100 billion and they are going to fire all the staff and somebody offers me N80 billion and they are going to keep all the staff, I will take the N80 billion and keep the staff.

'The issue of 'fit and proper' is Central Bank's issue. Whoever buys the bank has to be approved by the Central Bank as you know. So, the Central Bank has to approve the person as fit and proper owner of the bank because that is a regulatory issue'.

On the speculation that some South African banks, including Firstrand expressed interest in Enterprise Bank, but later withdrew, Chike-Obi said: 'It is only FirstRand by the way, not South African Bank.

'FirstRand always wanted to buy Keystone Bank. They have never been interested in Enterprise Bank. They have come to me and say they want to buy Keystone Bank and I said, 'wait till the end of the year.'

'When we announced Enterprise Bank first; they of course said they don't have interest in Enterprise Bank because they never were. So, the whole story of how South African banks were interested and they are no longer interested is completely false. It is only FirstRand, and the only bank they are interested in is Keystone. They are not interested in anything else, they are interested in Keystone and when it comes to Keystone, you will see them there,' he assured.

Waivers on loans purchased
On granting interest waiver on loans purchased from the banks, he stated that the law does not permit the Corporation to waive interest on loans, adding that both the cost for acquiring and maintaining such loans must be recovered in full.

He said: 'What the law tells us is that if you buy a loan for N1, and it costs us another Naira for interest and all other things, we must recover all our cost plus our cost of maintaining it. That is what the law requires.

'We have a policy in AMCON that there is always a difference between the outstanding amount and what AMCON pays because AMCON does not believe what the banks say in the first place. So, if the bank says it is N100, we may pay N40 first.

'The law obliges us to recover that N40 plus the cost of acquiring it. That's the interest cost; we must do that. Our guideline generally, is that nobody can recommend something less than 100 percent of that.

'We try to get more, but we cannot get less than that. So, we don't waive interest and we do not waive cost of acquiring loans from what you said, but if a bank has a loan of N100  and sells to me for N40, it is the bank that is going to lose, because the bank made N60 loss. I paid N40 and I want to recover N40 plus interest. That is the policy.' (Vanguard)