The Asset Management Corporation of Nigeria has ended the second phase of its bail-out programme after it bought over N2.78tn total non-performing loans of banks on the face value.It has now moved to the third phase, which involves the management of all acquired assets.A senior official of the corporation told our correspondent that AMCON moved to the third and final phase as planned last week after it bought over the non-performing loans worth N2.78tn on the face value from 21 banks at a cost of N1.16tn.The source, who craved anonymity because he was not authorised to speak officially on behalf of the corporation, said the acquisition represented 95 per cent of all outstanding non-performing loans in the banking industry.The source added that AMCON now had representative shares in all the 24 banks in the country, pointing out that the corporation had commenced negotiations with the debtors with a view to recovering the debts."We completed the acquisition of the NPLs last month. All the total bad loans we bought at the end of the second phase were N2.78tn; that is the face value and not the actual cost to us. The cost to us is N1.16tn. This is the final and most important stage of AMCONs programme; the last phase will be the longest and may last for some years," he added.The source also pointed out that the nationalised banks might be sold earlier than expected, adding that AMCON had received bids from local and foreign financial institutions.He said, "We have received interests from different institutions, including local and foreign banks, to buy stakes in the three nationalised banks. But the corporation will not rush to sell the banks without making sure that all the problems have been resolved. The three nationalised banks and the other banks are now fully recapitalised and healthy."Efforts to reach the Managing Director of AMCON, Mr. Mustafa Chike-Obi, proved abortive as his phone lines were switched off.In recapitalising the eight banks that failed the special audit test conducted by the Central Bank of Nigeria and the Nigeria Deposit Insurance Commission, AMCON had spent a total of N2.1tn.AMCON had earlier injected N736bn into the three bridge banks to bring them to the capital and liquidity adequacy levels required by the CBN. It also injected N1.364tn into the remaining five rescued banks, which completed their recapitalisation plans in September to bring them to a position of zero capital.This gave rise to the recent directive by the House of Representatives to its Committee on Banking and Currency to investigate the CBN and AMCON over the Federal Governments intervention funds in the banks.The House, which gave the directive last Wednesday, further mandated the committee to examine the Banks and Other Financial Institutions Act and AMCON whether they conformed with the 1999 Constitution as amended or not.In the same vein, the House urged President Goodluck Jonathan to include the budget of the CBN and all independent revenue earning agencies of government in the 2012 budget proposal in line with the provisions of the Fiscal Responsibility Act, 2007.To avoid systemic failure, the corporation, at the end of the second phase, compelled certain banks, in consultation with the CBN, to systemically sell important loans to it to forestall any further crises in the future.Most notable among these are loans of Zenon Petroleum, Seawolf Industries and Geometric Power Industries. The loans of these companies, according to Chike-Obi, are performing but AMCON decided to buy them because they are huge loans.The total debt of the three companies bought by AMCON was over N275bn, with Zenon having N150bn; Seawolf, N100bn; and Geometrics, N25bn.
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