The Nation Newspaper

Tag: Chike-Obi

  • Stockbrokers’ chief, Chike-Obi call for govt’s intervention

    Founding managing director of Asset Management Corporation of Nigeria (AMCON), Mr. Mustapha Chike-Obi and president of Chartered Institute of Stockbrokers (CIS), Mr. Oluwaseyi Abe, have called on the government to support the recovery of the capital market by implementing policies that will boost liquidity and sustained growth of the market.

    Chike-Obi, who was the guest speaker at the investiture of Abe as the ninth president of CIS, said the issue of liquidity in the Nigerian equities market must be addressed without further delay as the absence of liquidity is undermining the recovery and potential growth of the market.

    According to him, the Nigerian equities market trades about $10 million worth of securities daily but has the capacity to do more with supportive policies that redirect domestic and foreign funds to the market.

    Abe said the capital market remains the driver of the economy and should be given the desired attention by the government in order to achieve the national growth objectives.

    “The importance of the financial system cannot be overemphasised.  It is the axle on which the wheel of the economy revolves.  A robust financial system engenders a stable macro-economy. The capital market is one of the most important drivers of economic growth and development.  It is a major source of funding for infrastructure with strong socio-economic impact; and there is a correlation between a robust capital market and accelerated growth,” he said.

    He assured stakeholders in the capital market of his administration’s resolve to initiate and implement policies that would bring about a turnaround of the capital market.

    Chike-Obi, who spoke on: “Growth, the only Nigeria’s Imperative” canvassed massive investment in infrastructure either through savings or borrowing at a very low rate.

    He said there was nothing in government borrowing to finance infrastructure noting that government should use its balance sheets creatively to provide guarantees that that allow banks and other investors to invest in infrastructure.

    “This system makes it easier for banks to lend money.  It also encourages foreign investors to come to a country.  What we have currently in Nigeria is currency-adjustment inflation,” Chike-Obi said.

    Chike-Obi, now executive vice chairman, Alpha African Advisory Limited, advocated Indonesian and Indian models of capital formation  to move the Nigerian economy forward.

    He said at least an investment of 30 percent of the Gross Domestic Product (GDP) in infrastructure annually would create a sustainable economic growth as it is done in Indonesia and India.

  • Oil workers want AMCON’s chair, Chike-Obi, sacked

    Oil workers want AMCON’s chair, Chike-Obi, sacked

    Oil workers acting under the aegis of Petroleum and  Natural Gas Senior Staff Association of Nigeria (PENGASSN) SEAWOLF Branch, has urged President Muhammadu Buhari to sack the Managing Director of the Asset Management Corporation of Nigeria (AMCON), Mustapha Chike-Obi.

    The spokesperson of the association,. Femi Akpata who spoke on behalf of the oil workers, said for the past 22 months, their salaries have not been paid.

    Akpata said since Chike-Obi cannot keep his promise of paying their salary arrears after buying the company (SEAWOLF) from its owner, he should be sacked.

    He said the AMCON chief entered into agreement with the workers that all liabilities should be shifted to AMCON, lamenting that for 22 months now,  the workers have been waiting and nothing has happened.

    He said: “We have had several meetings with the Ministry of Petroleum, Labour and Productivity; the Ministry of Finance had to intervene insisting that AMCON should pay the claims. AMCON even called us to say they will pay since last year, yet nothing has been done.

    But AMCON has denied owing the workers any salary areas. AMCON spokesman, Kayode Lambo, said it is SEAWOLF that is indebted to AMCON.

    He said the people agitating for salary areas were not engaged by SEAWOLF,  but employes of another firm, called OMS.

    Lambo said AMCON is at the moment looking for ways to recover its money    SEAWOLF which entered into a contractual deal with First Bank that it is unwiling to pay. He urged the workers to approach the appointed liquidator, Mike Igbokwe  for their salaries.

  • AMCON to off-set N1tr debt October

    AMCON to off-set N1tr debt October

    The Managing Director of the Asset Management Corporation of Nigeria (AMCON), Dr. Mustapha Chike-Obi, on Monday said the corporation plans to pay off additional N1trillion of its debts by October.

    Chike-Obi spoke at a one-day public hearing on the AMCON Act, 2010 (Amendment) Bill, 2014 organized by the Senate Committee on Banking, Insurance and other Financial Institutions in Abuja.

    He also explained how the agency applied the sum of N5.676 trillion it raised from government bonds in 2010.

    He added that the agency had recovered over 50 per cent of the non-performing loans it acquired at inception.

    Chike-Obi said, “Today, we have recovered over 50 per cent of the non performing loans we acquired and not the 15 per cent that has been thrown around in the press recently.

    “I want to say that these were debts that the banks had given up on. Some of those debts were seven to 10 years old.

    “Additionally, in December 2013, because of the huge success in restructuring and recovering debts, we have been able to pay off N1trillion of our debts well ahead of schedule.

    “We also plan to pay off an additional N1trillion of debts in October 2014 which will reduce AMCON’s indebtedness by 30 per cent in the first four years of operation.”

    He told the lawmakers that the N5.676 trillion was used to purchase Eligible Bank Assets (EBAs), recapitalization of Enterprise, Keystone and Mainstreet Banks and injection of capital into five intervened banks.

     

     

  • Chike-Obi: AMCON won’t invest N500b Sinking Fund

    Chike-Obi: AMCON won’t invest N500b Sinking Fund

    The Banking Sector Resolution Cost Fund (Sinking Fund) standing at about N500 billion is being kept with the Central Bank of Nigeria (CBN), Chief Executive Officer of the Asset Management Corporation of Nigeria (AMCON) Mustafa Chike-Obi has said.

    He told The Nation that there is no possibility of investing the fund because it was established solely to pay down AMCON bonds.

    Banks contribute 0.5 per cent of their total assets to the Sinking Fund, in line with the regulatory requirement setting up the corporation. Last year, the fee was increased from 0.3 per cent to 0.5 per cent.

    Chike-Obi, who faulted shareholders and stakeholders for querying the contribution, said banks had benefited so much from it since it was set up.

    “Let me say this to you, show me any bank in Nigeria that made more money in 2009 to 2010 than they are making now, even with the 50 basis points. If there is no AMCON, most of those banks will not be in existence today. So any shareholder that is complaining, it’s almost like somebody goes to the hospital and you cure him, and the doctor said, here is your bill, and he says, why are you asking me to pay now that I am healthy?

    “These banks, most of them would have died, the shareholders would have lost everything. We have banks making over N100 billion profits today, no bank ever dreamt of it before AMCON was created,” he said.

    Chike-Obi said he doubted if any bank would complain about the fee. “I don’t even think the banks are complaining. I think it is fringe people, shareholder activists that want to eat their cake and have it. Banks today are better off because of AMCON, even with this fee,” he said, arguing that the alternative was to let the banks fail, and the same shareholders will complain that we let the banks fail.

    “I am not sympathetic to any bank that says the 50 basis point is too much. I want to see the bank that says it was making more money in 2009/2010 than it is making today. Tell me that bank,” he added.

    He said it was important to ensure that the banks that created the problems solve them through their contributions to the Sinking Fund. “What we are doing is giving them time to pay over a long period of time, instead of asking that they pay immediately and create another bigger problem.”

    Chike-Obi said: “As soon as AMCON bonds are fully repaid, there will no longer be a Sinking Fund. It is not there to build bridges or anything else. It is designed for AMCON bonds, only,” adding that the Corporation plans to improve on its pace of loan recovery in 2014 as well as ensure that it retires another N1 trillion bonds within the year.

    On Monday, AMCON retired N1 trillion, out of the N5.7 trillion of its bonds held by investors. About N3.6 trillion of the bonds are being held by the CBN. The bonds were issued to defray the cost of long years of insider loan abuses, bad loans and declaration of false profits by banks which took the average non-performing loans (NPLs) for the industry to as high as 35 per cent.

    However, analysts have insisted that the AMCON bonds related liquidity increase could undermine the naira and add pressure on the CBN to raise Monetary Policy Rate (MPR) this year.

    CurrencyAnalyst at Ecobank Nigeria, Olakunle Ezun, said the MPR needed to rise to counter higher spending that would stoke inflation in the lead up to 2015 election. MPR is the benchmark rate by which the CBN determines interest rate, while Cash Reserve Requirement (CRR) is a portion of banks’ deposits kept by banks with the apex bank. The CBN has kept its benchmark rate unchanged since October 2011 to help stabilise the naira and keep inflation under control.

    But Chike-Obi said the bonds will not have adverse impact on the economy. “I think one, the money has been sitting with AMCON for a while, so, I don’t think we will use it to buy treasury bills, and I expect that the recipients of this money will invest it. I don’t think there will be much of monetary impact,” he said.

    He, however, said that redeeming the bonds has boosted people’s confidence on the Corporation. “I think it sent a very positive message to Nigerians and other people across the world that we are serious with what we are doing, and that any money we get will be used to retire our liabilities, and will not be diverted. This is probably the first time, a Nigerian institution, has returned this amount of money, and reduces its liabilities, voluntarily and willingly,” he said.

     

  • AMCON has stopped buying bad loans – Chike-Obi

    AMCON has stopped buying bad loans – Chike-Obi

     

    The Asset Management Company of Nigeria has stopped buying bad loans from the banking sector, its chief executive said on Tuesday, a move aimed at discouraging excessive risk-taking in Africa’s second biggest economy after a 2009 financial crisis.

    AMCON was set up in 2010 to clean up the banking system following a $4 billion rescue of nine lenders that came close to collapse, but AMCON Chief Executive Officer, Mustapha Chike-Obi told Reuters it would no longer serve as a lifeline to banks with bad loans.

    Before AMCON took on Nigeria’s bad loans, they made up about half of all loans, the central bank says, but have since fallen to within its target of five percent.

    The International Monetary Fund (IMF) in its latest report commended Nigeria’s success in stabilising its banking sector but recommended AMCON wind down its operations to curb “moral hazard”, whereby a party is more willing to take a risk, knowing that the potential costs of taking such a risk will be borne by others.

    Chike-Obi declined to comment on IMF’s recommendation, but he said banks now bear the full risk of loans that turn bad. They must make full provision on their balance sheets or sell bad loans to a third party, he said

     

     

     

     

  • 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.

  • 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.”