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  • AMCON won’t buy more bad loans –Kuru
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  • AMCON won’t buy more bad loans –Kuru
 

AMCON won’t buy more bad loans –Kuru

AMCON won’t buy more bad loans –Kuru

by magna / Wednesday, 09 December 2015 / Published in Capital Market News

AMCON1

…Pledges raw deal for debtors

By Amechi Ogbonna and Blaise Uduze

THE Assets Management Corporation of Nigeria (AMCON) yesterday foreclosed further purchase of Nigerian banking industry’s delinquent loans going forward, insisting that badly managed banks should be allowed to die.

The clarification came on the backdrop of anxiety that the stock of non performing loan has gone above the mandatory 5 percent of industry loan portfolio to nearly 10 per cent.

But speaking at his first interactive session with the me- dia in Lagos Tuesday, Managing Director of AMCON, Mr Ahmed Kuru, declared that the corporation would no longer take up anymore delinquent risk assets of Nigerian banks, but would mobilise available resources toward recovering all bad loans it bought from them in 2009. “We won’t take up new loans because AMCON is not NPLs organisation set up to exist forever. So if we leave our doors open to acquire more bad loans, most banks management would become reckless with their operation with the understanding that somebody is already waiting in the background to clean up their mess.

All over the world, banks are businesses set up to make profit and if they fail to make profit and mismanage their resources, they should be allowed to fail.” Kuru said

He explained that AMCON will only intervene in situations that are similar to the 2009 global financial crisis but would in the next few years be only concerned with how to pay the N5.6 trillionn loan obligations in its books.

According to him if the cor- poration continues to buy new bad loan from banks, many of the managers will take a lot of things for granted, a situation he said could even lead to the establishment of a second AMCON to rescue the first AMCON.

He said “If you do a critical analysis of the banks’ loan portfolio today you will be amazed at what you will see andsowedonotwanttoget involve in the acquisition of fresh bad loans.”

On recoveries, the AMCON boss promised he would go beyond naming and sham- ing serial debtors in the years ahead to compel them to pay.

“We disposed a number of assets we are holding and had some challenges selling off some others due to the crash in property prices across the country. But our mandate is to recover our money with bettors and to honor obligations to the people we are owing.

But those that took our money and diverted it to other uses must be made to account for their action.” He said He also pointed out that the Sinking fund which assumed the industry will be growing at 20 percent suffered some impairments in the past few years when it had been growing only by less than 12 percent.

Kuru said disposal of assets has also been slow due to poor liquidity situation in the economy as most people coming to buy assets from AMCON want to do so under distressed situation which will not be good for the corporation. Going forward, he said three will be no more secret sale of asset, as it will be advertised in the newspapers through competitive bidding.

Source : SunOnline

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