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AMCON gulps N125.9bn as Sector Resolution Funds from Nigerian banks in Q1 2022



The Asset Management Corporation of Nigeria (AMCON) has received a sum of N125.9 billion from twelve commercial banks listed on the Nigerian stock market as part of the Sector Resolution Funds in the first quarter of 2022, analysis shows.

According to the data collected from the financials of the listed banks, AMCON bank charges increased by 29.5% from N97.18 billion paid in the corresponding period of 2021 to N125.9 billion in the review quarter.

The twelve banks are Access, GCMB, Fidelity, FBN, GTCo, Stanbic IBTC, Sterling, UBA, Union, Unity, Wema, and Zenith Bank. The increase in AMCON charge is attributed to the impressive rise in the total assets of the banks. Notably, in the first quarter of 2022, the aggregate total assets of the banks stood at N61.23 trillion, representing 5.29% increase compared to the beginning of the year.

In the previous year, the total assets of the twelve banks had increased by a whopping N8.75 trillion, largely due to increased customer loans.

The fund is part of the requirement of the AMCON (Amended) Act 2015, which mandates banks to make contributions to a fund established by the Asset Management Corporation of Nigeria Act, effective from January 1, 2013.

Banks are required to contribute an equivalent of 0.5% of their total assets plus 0.5% of all contingent assets as of the preceding year-end to AMCON sinking fund in line with existing guidelines. This contribution is for a period of 10 years from 2013, it is non-refundable and does not represent any ownership interest.

A cursory look at the data from Nairalytics shows that the twelve banks have paid in excess of N1 trillion to AMCON between January 2017 and March 2022. It is worth noting that the charge is sometimes expressed as Sector Resolution Fund, AMCON sinking fund, or part of regulatory costs

Biggest payers

First Bank Holdings paid the highest as AMCON charges in Q1 2022 with N29.1 billion, an 89.6% increase compared to N15.33 billion paid in the corresponding period of 2021. This is following a 3% increase in its total asset to N9.21 trillion as of the same period. The holding company have paid over N207.49 billion to AMCON in the last five years

Second on the list is Access Bank, with N26.69 billion, representing a 26.8% increase from N21.04 billion paid in Q1 2021. This is no surprise considering that Access Bank is also the largest commercial bank in the country based on total assets at N12.1 trillion as of March 2022/

Zenith Bank followed with a N21.4 billion AMCON payment, which is 12.8% higher than the N18.96 billion paid in the considering period of the previous year. Its asset is stated to stand at N10.52 trillion, the second-largest bank by asset. Zenith Bank has paid N151.63 billion in AMCON charges in the past five years.

GTCo and Stanbic IBTC followed in the list with N11.64 billion and N8.71 billion respective payments in Q1 2022, while their total assets stood at N5.49 trillion and N3.09 trillion.

AMCON was established in 2010 to buy the Non-Performing Loans (NPLs) of Nigerian banks to stabilise the banking system and is currently being funded by a combination of loan recoveries, contributions from the Central Bank of Nigeria (CBN), sale of assets pledged, and a sinking fund levied on the banks.

The rising bad loans and the need to save the banking industry from imminent collapse prompted the federal government to set up AMCON in 2010 with a 10-year mandate. The AMCON Act 2019 (Amended) grants the corporation more powers to recover bad debts from obligors.

Banks were initially mandated to contribute 0.3% of total assets to the sinking fund. This was further increased to 0.5% of total assets in 2013 (and 0.33% of contingent liabilities).

Some of the key objectives of the Act is to assist eligible financial institutions to efficiently dispose of eligible bank assets in accordance with the provisions of the Act. Also, hold, manage, realise and dispose of eligible bank assets (including the collection of interest, principal and capital due and the taking over of collateral securing such assets) in accordance with the provisions of the Act.

Meanwhile, the Ministry of Finance or the Central Bank of Nigeria may require the Corporation to report to it at any time and in any format that the Ministry of Finance or the CBN may direct on any matter, including the performance of its functions under this Act and any information or statistics relating thereto.

Money market

FBN Holdings’ market capitalisation hits $2.6bn after week of growth



FBN Holdings, one of Nigeria’s oldest banks on Wednesday has achieved a market capitalisation of N1.06 trillion ($2.6 billion) after a week of growth, with the share price rising by around 10 per cent.

The surge began in 2022 after billionaire investor Femi Otedola acquired a majority stake in the bank, triggering investor enthusiasm and a flurry of stock purchases.

At the time of Otedola’s acquisition, FBNH traded at just under N6 per share, meaning the stock price has quadrupled since the announcement.

In its third-quarter financial statements for the period, FBN Holding’s profit after tax (PAT) was N236.4 billion, a 159.2 percent increase from the N91.2 billion recorded in the corresponding period in 2022.

By surpassing the N1 trillion market cap, FBNH joins the exclusive group of Nigerian publicly traded companies known as SWOOTs (Stocks Worth Over One Trillion).

Other members of the SWOOTs group include Dangote Cement, Airtel Africa, MTN, BUA Cement, BUA Foods, Seplat, Zenith Bank, and GTCO.

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W’ Bank commits $5bn to expand electricity access in Africa by 2030



The World Bank has announced plans to allocate $5 billion towards bringing electricity to 100 million people in Africa by 2030.

The announcement was made by the President of the World Bank, Ajay Banga, during his speech at the mid-term review of the International Development Association’s $93 billion replenishment package in Zanzibar, Tanzania.

Banga highlighted the importance of providing support to low-income countries through the bank’s IDA, which offers zero- or low-interest loans.

He cited the initiative to bring electricity to millions of people in Africa as an example of how the funds from IDA will be used.

The World Bank’s plan to bring electricity to 100 million people in Africa by 2030 is a significant step towards improving the quality of life for millions of people on the continent.

The lack of access to electricity has been a major hindrance to economic development in many African countries, and this initiative will help to address this issue.

The allocation of $5 billion towards this project is a clear indication of the World Bank’s commitment to supporting sustainable development in Africa.

Banga said World Bank shareholders, donor countries and philanthropies needed to dig deeper to help IDA deliver better development outcomes to low-income countries.

He said, “The truth is we are pushing the limits of this important concessional resource and no amount of creative financial engineering will compensate for the fact that we need more.”

He also said the World Bank needs to revamp how it evaluates its performance to focus on improved outcomes, not numbers of projects or dollars disbursed.

That means moving towards platforms that can be replicated, such as an IDA-financed mini-grid that delivers electricity to rural communities in Nigeria.

“But this is just one example, I want to see 100,000 – 200,000 – half a million more,” he said, adding that IDA was investing $5 billion to deliver affordable renewable electricity to 100 million Africans before 2030.

The World Bank boss added, “But how can we hope to make even adequate progress while 600 million people in Africa – 36 million of whom live here in Tanzania – still don’t have access to reliable electricity? Put simply: We can’t.”

The current, 20th IDA funding round is due to be completed on June 30, 2025, with the Zanzibar conference aimed at adding to that funding.

Banga used to launch his campaign for the subsequent round of funding to well exceed $93 billion.

The World Bank President in Zanzibar said, “The truth is we are pushing the limits of this important concessional resource and no amount of creative financial engineering will compensate for the fact that we need more funding. This must drive each of us to make the next replenishment of IDA the largest of all time.”

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Money market

CBN approves reviewed service charter to enhance business facilitation



By Sodiq Adelakun

The Central Bank of Nigeria (CBN) has announced the approval of its reviewed Service Charter by Governor Olayemi Cardoso.

The Service Charter is a requirement of the Business Facilitation Act (BFA) 2022 and aims to improve the ease of doing business in Nigeria.

It also enables the Bank to comply with SERVICOM Nigeria’s directives on improving customer service delivery.

The Charter outlines the Bank’s promises to work with its external customers to meet their service expectations, as well as what the Bank expects from them.

In the foreword, the Governor reiterated the Bank’s “commitment to providing more responsive and citizen-friendly governance through quality service delivery that is efficient, accountable and transparent,” the CBN stated on its website.

The document outlines the Bank’s mandates, vision, mission, and core values. It contains the services the Bank offers through its various departments and the service standards for each service.

The Service Charter also includes a standardised customer complaints form for reporting service failure and a mechanism for addressing service failure in any of the Bank’s services.

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