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Banks Pay N136bn As Levy To AMCON In 2016

Published by Leadership on Mon, 29 May 2017


By Bukola Idowu, LagosCommercial banks operating in the country have contributed N136 billion to the Assets Management Corporation of Nigeria (AMCON) sinking fund representing 0.05 per cent of their total assets in 2016 banks.LEADERSHIP findings also revealed that there is likelihood that the percentage being contributed will be increased further in 2017.While shareholders of banks continue to complain of the burden of the AMCON levy on their return on investments, the managing director and chief executive of AMCON, Ahmed Kuru said the percentage coming from the banks assets will be revisited once the banking industry recover from its present woes.The banking industrys performance has been poor in the past couple of years with only a few strong banks recording increase in profitability while others are saddled with the burden of non-performing loans.Asides their NPL provisioning, the AMCON levy has also been eating deep into the profitability of some banks as some of them have paid an amount that suppressed their profit for the year. Kuru who said the bad bank had anticipated an inflow of N288 billion from the banking sector, said it got only 47 per cent of what it envisaged.In all, he said contribution to the sinking fund reserves has accumulated to N913 billion as at December 31, 2016, pointing out that if the economy fails to pick up as anticipated and the banking industry does not improve its performance, the bad bank may not be able to meet its closure date.Kuru explained the contribution from the banks is crucial as it needs to offset an annual interest of N280 billion to the Central Bank of Nigeria (CBN) annually. He however noted that it is holding back on increasing the percentage payable from the current 0.05 per cent of total assets as it would have a negative impact on the banking industry which is still under pressure from the economic downturn of the country.According to him, it would be unadvisable to increase the percentage now or over the next couple of years because the AMCON fee is based on banks total assets and we have some banks that their contribution was more than the profit that they made last year.The law is flexible and we can tweak the contribution rate. If the banks start doing well, the percentage of contribution will be revisited but for now we dont want to overburden the banks so that they will not end up with AMCONMeanwhile, the chief financial Officer of AMCON, Mr Olugbenga Ataiyero said, The projection of the bad bank was that the banks were going to grow at 20 per cent, which never came to pass. So, the contribution that we expected from the sinking fund was not up to what we had budgeted. In 2016, we had envisaged that the banks would have contributed about N288 billion, but they actually contributed only N136 billion.The post Banks Pay N136bn As Levy To AMCON In 2016 appeared first on leadership.ng.
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