The Nation Newspaper

Tag: AMCON

  • CBN awaits National Assembly to invest N3b ‘idle’ cash

    CBN awaits National Assembly to invest N3b ‘idle’ cash

    • No sanction for erring banks on ATM fee waiver

    The Central Bank of Nigeria(CBN) is awaiting the National Assembly’s passing of the Securitisation Bill to enable it invest the N3 billion idle funds in treasury bills (TBs), found during the mopping up of funds to reduce inflation.

    Its Director of Communication, Mr Ugo Okoroafor said CBN is pursuing the law’s enactment to avail itself of opportunities in the asset securitisation investment window.

    He also said CBN won’t sanction banks that disobeyed the Banker Committee’s directive to waive the N100 inter-bank Automated Teller Machine (ATM) charge.

    Okoroafor told reporters in Ijebu-Ode, Ogun State that the TBs were lying fallow because CBN cannot move them to other sectors of the economy. He said the idle funds could be invested in government- backed securities to enhance economic growth.

    Okoroafor said: “About N3 billion is lying fallow in the treasury bills end of the fixed-income securities market. If the money is released, it can serve investment purposes. That is why CBN is pursuing Securitisation Act in the National Assembly to enable it to invest the money in securitised assets like mortgages.”

    According to him, the reforms have recorded some achievements as evident by the changes in the banking.

    He said the industry is stabilised, stronger, robust and growth performance-oriented, noting that the establishment of the Assets Management Corporation of Nigeria (AMCON) has helped in cleaning up the bad debts of banks.

    The reforms, he said, resulted in the introduction of financial literacy programme, establishment of consumer protection unit, among other initiatives capable of increasing accessibility to banking.

    He said the CBN Governor, Sanusi Lamido Sanusi, at the last Monetary Policy Meeting, insisted that attention must be given to collation of data on various aspects of the economy.

    “Sanusi insisted that we should be getting data as at when due from the National Bureau of Statistics to encourage economic growth. When data are made available, it would assist in planning for the economy,” he said.

    The essence of having a regular data, he said, is to keep a close tab on the economy, and further benchmark it against international standards.

    He said the country’s foreign reserves are good enough, arguing that the $75 oil benchmark was arrived at to prevent Nigeria from consuming everything at its disposal at once.

    The CBN’s spokesman said infrastructure is one of the major problems in the industry, adding that banks could not lend because of infrastructural challenge, adding that another is identity, a problem which has affected the capacity of banks to lend.

    Okoroafor said CBN won’t enforce the N100 ATM charge waiver because it was the banks that agreed to stop the fee, adding that the regulator would continue to encourage and advise the banks on the need for compliance.

    The Nation’s findings showed that many of the banks are still charging customers the fee.

    The CBN’s position contrasts that of the Nigeria Deposit Insurance Commission (NDIC), which earlier warned that commercial banks that violate the policy would be sanctioned.

  • Smaller banks beat big ones in credit facility

    Small banks, otherwise known as Tier-2 banks, have outpaced the big ones (Tier-1 banks) in advancing loans, a report from Renaissance Capital (RenCap), an investment and finance firm has shown.

    Loan growth index reviewed by the firm showed that United Bank for Africa (UBA) and Access Bank grew their loan portfolio by three per cent year-to-date. Diamond Bank, it said, grew its loans portfolio by 38 per cent, year-to-date.

    RenCap said for 2013, in the absence of significant progress in power sector reforms or upstream oil and gas projects, the Tier-1 banks are likely to repeat similar levels of loan growth to those they achieved this year.

    However, the non-performing loan (NPL) ratios at as at September, 2012, did not cause any stir. “In our opinion, most of the banks under our coverage cannot sustain NPL ratios of around five per cent without impairment expenses of around two per cent. Nevertheless, given the magnitude of the Asset Management Corporation of Nigeria (AMCON) clean-up in 2011, we would expect the banks to continue reporting below-average charges into fiscal year 2013, with normalisation likely to start coming through in fiscal year 2014,” it said.

    It said since the beginning of the year, most of the banks have been expecting lower tax rates on the back of their high holdings in fixed-income securities and, for some, tax credits from losses over the past few years.

    “We also highlight that, following the inclusion of tax exemptions on fixed-income securities in the federal government’s official gazette in December 2011, these multi-year exemptions effectively kicked in this year. All things being equal, we would expect the larger, more liquid banks with proportionately higher holdings of fixed-income securities to report relatively lower tax rates at year-end,” RenCap said.

    On share-price performance, the banks have been strong performers’ year to date, with all except First City Monument Bank in positive territory. However, on a two-year view, the price performances of most of the banks’ stocks are still negative, with only Guaranty Trust Bank, Zenith Bank and FirstBank in positive territory.

    RenCap has also revised its ratings and target prices for bank stocks to reflect these forecast changes. We have downgraded First Bank, Diamond Bank and Fidelity to hold ratings from buy, as it finds lower relative potential upside in these names following their strong share-price performance.

    RenCap recommended United Bank for Africa and Zenith Bank for buy among tier-1 banks and Skye Bank as buy among tier-2 banks.

  • AMCON, Capital Oil’s talks collapse

    AMCON, Capital Oil’s talks collapse

    The talks between Capital Oil and Gas Industries Ltd and Assets Management Company Ltd (AMCON) have collapsed.

    Spokesman of Capital Oil, Mr. Nick Hayes, said this mean plans by the company to re-open its depots in Lagos and other parts of the country have failed.

    He said: “The implication of this is a crisis situation ahead, in regards to the shortage of fuel otherwise known as premium motor spirit (PMS), currently being witnessed across major cities in the country.”

    Providing insights into what led to the collapse of talks barely 48 hours after Capital Oil and Gas said it was satisfied with discussions with AMCON, the spokesman blamed it on “inordinate ambition of some forces to take over the running of affairs in the company wholesale.”

    In a statement yesterday, Hayes said: “It has now become very obvious that there is a grand design by some very ambitions people to capture the entire business concern and run it as if they set it up in the first instance.

    “These people are the ones pushing AMCON to bring very unacceptable conditions to the negotiating table. Their whole plot is to ensure that there is no amicable settlement and in that way, AMCON can do their bidding which simply is, to take over the running of the affairs of the company.”

    He said when Capital Oil sensed the personal interest, it backed out of the settlement plan electing instead to head back to the courts.

    Hayes added: “Another issue that led to the disagreement by both parties we learnt, is the appointment of an Administrator to oversee the company. AMCON is understood to favour the appointment of an administrator who shall have sweeping powers. Expectedly, top Management of Capital Oil and Gas kicked against the move which they say will give such an Administrator the authority to throw out thousands of Nigerian youths in the employ of the company presently, in favour of those the Administrator may want to bring in. Mr. Hayes hinted that this is one issue that hurt the MD/CEO of Capital Oil and Gas, Chief Ifeanyi Ubah, who has always been on the side of the youths as far as employment is concerned.

    “He then warned that if AMCON is not stopped from playing politics with the country’s economy as they are presently doing, what happened in January when Nigerians took to the streets in protest against the removal of subsidy on oil, may be a child’s play to the chaos that will ensure when fuel finally dries out of filling stations nationwide.”

     

  • AMCON okays bridged banks’ performances

    DESPITE the delays in selling the three bridged banks to investors, the Asset Management Company of Nigeria (AMCON) has given them a clean bill of health.

    The banks are Mainstreet Bank Limited, Keystone Limited and Enterprise Bank Limited.

    Speaking to The Nation yesterday, AMCON Managing Director Chike-Obi said the banks are safe, adding that his organisation was making efforts to sell them and put them on a sound footing.

    He said the intention to list the banks on the floor of the Nigerian Stock Exchange (NSE), the appointment of Ctibank Nigeria and Rennaisance Capital as advisers, among other options prepared to facilitate the sale of the banks, did not mean the banks are not secured.

    He said: “As far as I’m concerned, there are no more problems in the three banks. The appointment of the two advisers to appraise the values of the three banks that were nationalised last year does not mean that they are still battling withc problems, such as assets/loan portfolios. We have done everything possible to ensure that the banks are free of problems. Our efforts have yielded results as the banks recovered huge toxic assets and provided sound risk management policies, among others.”

    He said AMCON was awaiting the results of the valuations of the banks before taking the next line of action.

    On the proposed listing of the banks, the AMCON boss said it was immaterial to think about whether the banks would be given considerations by investors in case they were listed on the NSE.

    He said it would amount to speculations to think about whether the investors would patronise the banks if they eventually get listed on the NSE, adding that there is no need of thinking about such issue now.

    “It is wrong to speculate about the banks. We have put in place several options to sell the banks, and one of them is proposed listing of the banks.

    “We appointed advisers for the banks three months ago. They would tell us what happen when they finish the evaluation of the banks. Right now, we do not know the fate of the banks,” he said.

    Similarly, a market analyst, Mr Tayo Bello, said nothing could be grevious than to say the banks that are still enmeshed in financial crisis. Bello, a lecturer at Babcock University, Ogun State said the balance sheets of the banks have been cleaned to prepare them for sale.

    He said the tendency is high that the three banks would get investors when the right time comes, adding that they appear to be in good financial position.

    He said the stock market is rebounding, arguing that it would not be difficult to get investors for the banks if the plans to list them scaled through.

  • Otedola’s N141b settlement not inspired by CBN directive, says AMCON

    Otedola’s N141b settlement not inspired by CBN directive, says AMCON

    The settlement reached by the oil tycoon, Mr. Femi Otedola with the Asset Management Corporation of Nigeria (AMCON) on his N141 billion debt to banks had nothing to do with the Central Bank’s directive cutting off credit facilities to some categories of individuals and companies, AMCON Managing Director/Chief Executive, Mr. Mustafa Chike-Obi, has said.

    The CBN had directed the banks to desist from giving further loans to 139 companies and 419 directors indebted to them until they liquidate such debts.

    But soon after the directive came a report that Mr. Otedola had reached a settlement with AMCON on his debt by transferring his assets worth the amount to the corporation, prompting the House of Representatives to threaten to probe the deal.

    Speaking in an interview with The Nation on Sunday, Mr. Chike-Obi said the deal with Otedola was concluded before the CBN’s directive.

    He said it was just a coincidence that the transaction became public knowledge shortly after the apex bank’s announcement.

    The House of Representatives on Thursday set up a nine-member committee to investigate the alleged payment of N140 billion outstanding debts owed the AMCON by Zenon Petroleum and Gas Limited and Forte Oil Plc, owned Otedola.

    The committee which is headed by Femi Gbajabiamila, the Minority Leader of the House, has other members like Sani

    Kalgo, Uzor Azubuike, Idris Wase, Jerry Manwe, Pally Iriase, Evelyn Ojakavo and Muraina Ajibola.

    The committee is expected to report back to the House in four weeks.

    The resolution emanated from a motion moved by Bimbo Daramola (ACN-Ekiti), which was unanimously adopted without debate.

    According to Chike-Obi, “This settlement with Femi Otedola had nothing to do with the CBN directive. We have been engaging with him for at least nine months. We had to value the assets and that takes time. But it is just unfortunate that people are insinuating that these settlements had something to do with the CBN announcement.

    “There are people who have now approached us because of the CBN directive and that process will take anywhere from three months to six months. I wish it was that easy to recover debts. He had court injunctions, we had to negotiate. So, it is a complicated matter.”

    He is happy that a lot of those on the debtors’ list have been making efforts for settlements.

     

  • Reps to probe Otedola’s AMCON payment

    Reps to probe Otedola’s AMCON payment

    …Set up panel

    The House of Representatives on Thursday set up an eight-member panel to investigate the payment of N140.9 billion to Asset Management Corporation of Nigeria by businessman Femi Otedola.

    Speaker Aminu Tambuwal named the members of the panel to investigate the transaction which took place during the end of legislative year recess of the House.

    The Minority Leader of the House, Femi Gbajabiamila,  heads the panel.

    Other members are Sani Kalgo, Idris Wase, Jerry Manwe, Pally Iriase, Muraina Ajibola, Evelyn Ojakovo and Uzo Azubuike.

    The House had criticized the N140.9 billion debt settlement deal between Otedola and AMCON, saying the transaction was suspect.

    The payment, which was credited to AMCON’s managing director, Mustafa Chike-Obi, was Otedola’s outstanding debt to the corporation.

    Obi confirmed that AMCON board approved the transfer of Otedola’s assets as well as undisclosed cash to the corporation as full payment and final settlement of his liabilities.

    The House, however, said the transaction was done with “confidentiality and secrecy” and that “the National Assembly would be interested in getting full details of the transaction.”

    According to the House, the procedure was unacceptable.

    “It is curious that AMCON, being a government establishment, which is under the purview of the National Assembly, could do that without the knowledge of the House,” Chairman, House Committee on Media and Public Affairs, Hon. Zakari Mohammed, had said.

    .

     

  • Nigeria sovereign investment authority and AMCON

    Nigeria sovereign investment authority and AMCON

    CAPTIONS

    AMCON 1 (L-R) President Goodluck Jonathan, Minister of Finance Dr Ngozi

    Okonjo-Iweala, and Head of Admin &Services Asset Management of Nigeria

    (AMCON), Iyatum Adode, during a meeting at the Presidential

     

    AMCON 2 (L-R) Minister of State For Finance Dr. Yerima Lawal

    Ngama, President Goodluck Jonathan, Minister of Finance Dr Ngozi

    Okonjo-Iweala, and Head of Admin &Services Asset Management of Nigeria

    (AMCON), Iyatum Adode, during a meeting at the Presidential

    Villa Abuja yesterday.

    AMCON 3 L-R Minister of State Finance Dr. Yarima Ngama, President

    Goodluck Jonathan, Minister of Finance Dr. Ngozi Okonjo Iweala and

    Head Asset Management Corporation of Nigeria (AMCON) Iyatum Adode

    during their courtesy visit to the Presidential Villa Abuja yesterday.

     

    NSIA 1,2,(L-R) Chairman Nigeria Sovereign Ivestment Authority

    (NISA) Mahey Rasheed,President Goodluck Jonathan, Minister of Finance
    Dr Ngozi Okonjo-Iweala,and Managing  Director Nigeria Sovereign
    Ivestment Authority Uche Orji, after  the Inauguration of the NISA, at
    the Presidential villa Abuja  yesterday.

  • N141b debt: Reps can’t use AMCON to settle scores, says Chike-Obi

    N141b debt: Reps can’t use AMCON to settle scores, says Chike-Obi

    •‘Settlement in order’

    THE Managing Director/Chief Executive Officer of Asset Management Company of Nigeria (AMCON), Mr. Mustafa Chike-Obi, has given the process leading to the transfer of N141 billion assets to the organisation by top businessman, Mr. Femi Otedola, a clean bill of health.

    The deal has come under attack from a section of the public and the House of Representatives which felt it was shrouded in secrecy.

    The Central Bank (CBN) had listed Otedola among 419 individuals, company directors/shareholders and 113 organisations barred from receiving loans from banks until they clear the amounts currently standing against their names.

    The decision, the CBN said, was aimed at “strengthening financial stability and entrenching a culture of financial discipline.”

    Speaking exclusively to The Nation on Sunday, Chike-Obi said the transfer of Otedola’s assets followed due process and was not influenced in any way as being suggested in some quarters.

    The House of Representatives had, in a statement last Monday by the Chairman of its Committee on Media and Public Affairs, Alhaji Zakary Mohammed, said it would demand details of the transaction between AMCON and Otedola because, as he put it, it was done with ‘confidentiality and secrecy’.

    But the AMCON boss denied the insinuation.

    He said: “We have been negotiating with him in the last six months. There is a process. We had to analyse his assets, value the assets, make proposals and counterproposals, go to the exco and to the board. We needed to go through all of that and we did that for six months.”

    The operation of the organisation, he said, is guided by Sections 63 and 14 of the AMCON Act.

    “Section 63 says: ‘AMCON may carry out all its functions without the approval or permission of any other authority.’ It is in the Act. So Zakary Mohammed is incorrect,” Chike-Obi emphasised.

    He added: “We have 12, 000 loans and we are resolving about five loans a day. If I had to seek the permission of the House of Assembly to restructure loans, then I cannot do my work.”

    Besides, he said the agency is short-staffed.

    “We don’t have enough staff to resolve even five loans a day. The whole of the staff put together are 360. If they had to review loans, then they would have no other work to do.

    “It is illegal because Section 63 of AMCON expressly tells us that we should not ask permission from any other authority and Section 14 says the same thing. So, I don’t know what Zakary Mohammed means.”

    Chike-Obi said the Committee Chairman probably read newspaper headlines and hurriedly jumped into conclusion.

    “Negotiations are conducted between two parties. That’s what we call bilateral negotiations. I don’t have to tell anybody I met Arik today or I met Arik yesterday or I’ll meet with Arik tomorrow. Does it make sense to you that I should negotiate with somebody and before we have even agreed in resolving the issues, I should go and announce to the world?”

    Miffed by insinuations that the transaction was shrouded in secrecy, he raised several posers.

    “Do you know who is on my board? You have Deputy Governor of the CBN, Managing Director of the Nigeria Deposit Insurance Corporation, Director General, Securities and Exchange Commission. You think that after they approve something, it’s secret? They are all representing everybody in the country. So, where is the secrecy there when we took it to the board? If you take something to a board like that how can it be secret?”

    He dismissed as an insult on the intelligence and integrity of the AMCON board members, the statement that the transaction was probably influenced one way or the other by them.

    He declared: “I’ve restructured over 500 loans, including Arik, Aero Contractors, MRS. These are big companies. Why did Zakary Mohammed not care about the 500 loans I have restructured?”

    “We restructured Arik’s debts a year and half ago. Nobody asked us about that. The other 500 loans we restructured nobody told us it was done in secrecy,” he noted.

    AMCON, he stressed, cannot be drawn into any political intrigues by any individual or group. “If he (Zakary Mohammed) wants to fight Femi Otedola, let him fight Femi Otedola. He cannot use me or AMCON. If Zakary Mohammed had said MD AMCON, we read in the papers that you have done this and that, can you come and share with us the process that led to the recovery of these assets? I would gladly oblige him. But he just saw the headlines and went ahead to form an opinion.”