Debt Recovery: Asset Management Corporation Repays N3.6trn To CBN

The Asset Management Corporation of Nigeria (AMCON) has repaid about N3.6 trillion to the Central Bank of Nigeria (CBN) since its inception.

AMCON is a government-owned agency established in 2010 to stabilise and revitalise the Nigerian financial system.

This is even as the corporation made N156billion debt recovery in 2024 with a projection to make about N215billion recoveries by the end of 2025.

The managing director/CEO of AMCON, Gbenga Alade, who disclosed this on Wednesday at a media parley in Ikeja, Lagos, said that even though it had paid N1.7 trillion to purchase the toxic assets of banks, it had been able to repay about N3.6 trillion and still owed about N3 trillion.
In the beginning, AMCON purchased total loans worth about N3 trillion for the purchasing price of N1.7 trillion from the banks, which the corporation was committed to.

“Today, we have paid back about N3.6trillion. Yet, our debt remains about N3 trillion because of accumulated interest. Hence, we have repaid N3.6 trillion to the Central Bank of Nigeria (CBN), and yet, we still have another N3 trillion due to the compound interest factor. ”

AMCON, he said, restructured the banks by offloading toxic assets from their books and injecting fresh funds, aligning with corporate insolvency restructuring principles.

He added that, with this mechanism, bank depositors retain their deposits because they have confidence in the financial system, assuring banks’ ability to honour their obligations, noting that AMCON then manages the acquired Eligible Bank Assets (EBAs) preparatory to their disposal.

The CEO noted that, the law establishing AMCON upsets and reverses the contractual rights and securities law hierarchy by conferring priority to AMCON in disputes with bank debtors over collateral and contracts.

Alade also said, “As part of our recovery strategy, we have commissioned some foreign asset tracers who will help us locate where some of these obligors have hidden their assets across the globe.”

Speaking on the financial performance of the corporation since he assumed duties as the helmsman, he said, the corporation recorded total revenue of N156.25 billion and total operating expenses of N29.04 billion, saying, total operating revenue/revenue ratio was 19 per cent.

Alade stated that the projected total revenue for 2025 would be N215.15 billion, while the projected total operating expenses would be N29.06 billion, resulting in a total operating/revenue ratio of approximately 13.5 per cent.

“It is important to stress that the corporation has done tremendously well, especially when compared to other notable government-owned Asset Management Corporations around the world. Based on the balance at purchase, AMCON outperformed other asset management corporations worldwide by achieving over 87 per cent in recovery, despite the unique challenges associated with debt recovery in Nigeria.

“The Malaysian Danaharta, which is adjudged one of the best performing

Asset Management Corporation achieved only 58 per cent. The Chinese Asset Management Corporation, despite its stricter laws, gained just 33%. Only the Korean Asset Management Corporation (KAMCO) South Korea has achieved more recovery than AMCON, with about 100 per cent. This was due to their brute force with which they chased the obligors, “he pointed out.

Despite KAMCO’s recovery records, he said, the agency is still operational to date with slight realignments in its mandate, adding that, “other noted Asset Management Corporations that have transitioned into a perpetual institution of the various governments include, China Asset Management Company, Federal Deposit Insurance Corporation (FDIC) USA, and KFW Germany. So, without sounding immodest, AMCON has done well, and we will not relent until all the outstanding debts are fully realised.”

He said the current executives of the corporation has engaged seasoned consultants to carry out a comprehensive audit review of all AMCON cases across the Courts – the Federal High Court (FHC), which is our Court of first instance, the Court of Appeal, and the Supreme Court.

He said, the leadership of the judiciary at the three layers of the courts share the pain of AMCON, and deeply understands the challenge that the obligors pose to AMCON.

“Consequently, all the courts have approved the New Practice Direction for AMCON debt recovery. In addition, the FHC has also created the Insolvency Units in the bid to fast-track all AMCON cases that are pending in different courts, “he disclosed.

The CEO also noted that, the corporation’s recovery efforts have been strongly supported by President Bola Ahmed Tinubu, the judiciary, the CBN, the Federal Ministry of Finance and the Attorney General of the Federation, and Minister of Justice, the Board of Directors of AMCON, the EFCC, the Police, the ICPC, the National Assembly, among others.

He said the corporation “will continue to go about its recovery mandate with the fear of God, love of country, and complete adherence to the rule of law. Let me also alert you that, as we tighten the noose through the Courts on the obligors and deploy our strategies, most debtors will likely attempt to leverage the media to misinform the public.

“Yes, the wheel of justice grinds slowly sometimes, but with patience and dedication, we have continued to make progress. Our cases have also contributed to the development of jurisprudence in the country with the publication of the first set of the AMCON Legal Compendium – a compilation of AMCON cases at both the Federal High Court and the Court of Appeal.”