Abiru-led Senate panel pledges to help AMCON recover loans

Tokunbo Abiru, chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, has said that the panel set up to recover loans owed the Asset Management Corporation of Nigeria (AMCON) will do its job thoroughly.

Abiru spoke at the 2024 Senate Committee on Banking’s retreat with AMCON on Saturday, noting that AMCON, also known as bad bank, has helped to stabilise the banking industry and and restored confidence in the financial sector.

“You will recall that following the signing into law of the AMCON Bill in July 2010, the Corporation was established as an intervention agency to halt the drift caused by Non-Performing Loans (NPLs) in the banking industry with its adverse impact on savers and the entire economy.

“From available records, the Corporation had acquired at inception over 12,000 NPLs worth about N3.7 trillion from 22 commercial banks and injected a colossal amount as financial accommodation to 10 banks.

“Admittedly, the setting up of AMCON has succeeded, to a large extent, in not only stabilising the banking industry given that the purchase of Eligible Banks Assets (EBA) reinjected the much-needed liquidity into the Banking System, but also helped in restoring confidence in the financial sector.

“Without any doubt, AMCON was established at a time of considerable turmoil in the wake of the global financial crisis of 2008 to clean up the books of many ailing banks.”
He said as a result of AMCON’s interventions, thousands of jobs were saved as a number of banks were rescued from collapse.

Abiru further said that AMCON was not designed to be a permanent part of the country’s financial system but was meant to be closed in 2026.

“I am aware that the AMCON Amendment Act of 2021 extended the life of AMCON for another 5 years although it provides that the current tenor may be extended by a resolution of the National Assembly.

“So, we now stand at a pivotal moment where we must transition beyond AMCON as it is near impossible for the corporation to recover the substantial loans by 2026 when it is expected to wind down.”