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Senate backs AMCON’s plan to publish debtors’ list

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L-R: Senator Samuel Nnaemeka Anyanwu, Vice Chairman, Senate Committee on Banking, Insurance and other Financial Institutions; Chairman of the Senate Committee, Senator Rafiu Adebayo Ibrahim and Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru discussing during the Senate Committee retreat on the Amendment of the AMCON Act at the Intercontinental Hotel, Lagos on….Thursday
The Chairman Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Adebayo Ibrahim, has said that Nigeria can be made great again, if the legislature as a matter of urgency empowers the Asset Management Corporation of Nigeria (AMCON) to go after recalcitrant obligors. He said that is the only way AMCON can meet its mandate of achieving the tough mandate for which it was set up in 2010.

He said since AMCON over the past seven years have done its best to resolve these debts but are   still encountering resistance from obligor, the 8th Senate of the Federal Republic of Nigeria under the able leadership of Senator Dr. Olubukola Saraki, would have not option that to urge AMCON to compile and publish the list of all these debtors on major daily newspapers in the country. The move, he argued would place before Nigerians those who are holding the nation’s economy to ransom since they account for 80 per cent of AMCON’s N4.8trillion obligation.

The Senator, who spoke today at the opening of a 2-day retreat at Intercontinental Hotel, Lagos where they convened to discuss the all-important AMCON Act Amendment Bill, hinted that the Upper Chamber, as part of its oversight function, has decided that AMCON at this critical time in its lifespan must be given all the support it requires to perform as expected by all Nigerians. He however urged the Management of AMCON to collaborate with the Federal Ministry of Finance (FMF), the Central Bank of Nigeria (CBN), and the office of the Attorney General of the Federation to propose that the President of the Federal Republic of Nigeria and Commander-in-Chief of the Armed Forces issues an Executive Order on seizure of assets of persons who are indebted to AMCON.

In a keynote address he delivered at the commencement of the retreat, Sen. Ibrahim said the upper chamber is intent on having serious discussions as soon as possible with major stakeholders such as the CBN, the FMF, the Nigerian Deposit Insurance Corporation (NDIC) and relevant committees from the legislature among others, where issues hindering AMCON from performing optimally including the funding model of AMCON would be discussed to enable the recovery agency of the Federal Republic of Nigeria finish its assignment on a high.

According to him the Upper Chamber will at this stage bare its fangs by amending the AMCON Act because AMCON has been a key stabilizing and re-vitalizing tool in the Nigerian financial system and so will be supported by the legislature to enable the Corporation achieve its statutory objectives. He said the legislature therefore supports the proposed plan by AMCON to publish the list of especially the 350 obligors that accounts for nearly 80 per cent of the total huge debt of AMCON.

Earlier in his presentation, Managing Director/Chief Executive Officer, AMCON, Mr. Ahmed Kuru reminded the Senate Committee that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. He disclosed that AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the Federal Government therefore, Kuru said he is convinced that it is doubtful that the government can afford to expense AMCON’s debt in the short term.

It was for that reason, AMCON, after seven years of negotiating with the obligors with no commensurate recovery result, has decided to change its strategy, which now pays strict attention to enforcements as a way of compelling especially the recalcitrant obligors to come and pay up their debts. To achieve this however, Kuru said the Corporation will be heavily dependent on the legislature, most especially members of the committee to facilitate the amendment of the AMCON Act since most obligors of AMCON that are politically exposed and business heavyweights now employ different antics in law to tie the Corporation up in courts.

Further highlighting other challenges faced by the Corporation, the AMCON CEO, again said, “One of the major areas for amendment is the matter of vesting proprietary interest of all collateral assets acquired by AMCON from commercial banks. The proposed amendment will have retrospective effect. The vesting of proprietary interest of all collateral assets in the resolution vehicle was implemented in Malaysia and was instrumental to their success in recovering debt obligations.

“Our second challenge has to do with the disposal of assets due to the economic downturn. AMCON’s current assets under management (AUM), that is assets obtained from debt resolution, has a book value of N182 billion, which we are unable to sell. Our ability to successfully divest these assets, at competitive market price, is severely hampered by several factors including valuation methodology, unperfected title documents, state of the economy, purchasing power. The third challenge is the uncooperative attitudes of select obligors who are either unwilling and/or unable to settle their indebtedness. Such debtors prefer to resort to all manner of diversionary tactics as opposed to dealing with the problem of their indebtedness. It sees most of them are buying time, to where we do not know.”

Kuru also stated that from all indications, AMCON has in the past seven years exhausted the low hanging fruits and have had to roll up sleeves for a drawn out battle because it has become harder to get obligors to settle their debts. Throwing more light on this, the AMCON boss said, “To clarify, obligors indebted to AMCON for the sum of N1.3 trillion have sued us in various courts in Nigeria raising technicalities to avoid meeting their obligations. This has hampered our recovery efforts and our objective of obtaining the best achievable financial returns on assets acquired from the banks.”

For that reason, he informed that AMCON had presented the issue with 350 accounts that represent about 80 per cent of AMCON’s current exposure of N3 trillion as at May 31, 2018. AMCON, he said is still grappling with the issues that are multi-faceted, which consequently led the Corporation to reposition its debt recovery approach to focus on enforcement against obligors who are not willing to settle amicably.

In conclusion, Kuru said, “I will like to emphasize, once again, that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the Federal Government, it is doubtful that it can afford to expense AMCON’s debt in the short term.”

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BUSINESS

Fidelity Bank doles out N16m to 13 customers

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L-R: Divisional Head, Operations, Fidelity Bank Plc., Martins Izuogbe; Baale of Dankaka and N1 Million GAIM 3 Promo Winner, Alhaji Oluwa Kareem Amodu; his wife, Alhaja Amodu; Regional Bank Head, Apapa, Fidelity Bank Plc, Jude Monye at the 3rd Monthly Prize presentation ceremony of the Fidelity Get Alert in Millions Promo Season 3 (GAIM 3) held at the Fidelity Bank Trinity, Apapa Branch. Lagos ….yesterday.

Fidelity Bank Plc on Tuesday splashed 13 customers with N16 million under the Get Alert in Millions Savings (GAIM) season three initiative.

Mrs Chijioke Ugochukwu, the bank’s Executive Director, Shared Services and Product, stated this at the third monthly prize presentation in Lagos that the promo was an initiated aimed at boosting financial inclusion and saving culture.

Ugochukwu said that the bank, through the GAIM, had made significant impact on its customers.

She said that the monthly draw produced 13 cash winners and 18 consolation prizes, comprising refrigerators, generators and television sets.

Ugochukwu said that the bank had also given out N50 million and 54 consolation prizes under the GAIM season three initiative.

According to her, N60 million remains outstanding for grab by lucky customers in the course of the promo, adding that the bank has also earmarked N110 million to be won by customers for the GAIM season three initiative.

Ugochukwu further disclosed that the bank had given N2.67 million worth of airtime to about 1,964 customers, comprising of first 100 accounts opened weekly.

She said that the savings promo allowed the bank to go into nooks and crannies of the country to enlighten people on financial inclusion.

Mr Richard Madiebo, the bank’s Divisional Head, Retail Banking, said that the bank had made banking easy through the promotion.

Madiebo called on Nigerians to take advantage of the initiative to open account with Fidelity Bank, assuring customers that they had the chance of winning N1 million, N 2 million and more.

Alhaji Oluwakareem Amodu, the Bale of Dankaka, Ajeromi Ifelodun Local Government Area of Lagos State, who won N1 million lauded the bank for the initiative, saying that he opened the account with N1, 000, describing he promo as genuine.

Mr Rahman Yusuf, a star prize winner of N 2, appreciated the bank for its kind gesture of instituting the promo.

“I want to say a very big thank you to Fidelity Bank for this opportunity. I did not believe in it until I got here and confirmed that I won,” Yusuf said.

Yusuf said he opened the account with zero balance..(NAN)

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AMCON seeks buyers for Polaris Bank

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The Asset Management Corporation of Nigeria (AMCON)  is  seeking new investors to take over nationalised lender, Polaris Bank after elections next month. It is also taking stock of the bank’s assets ahead of the sale, its spokesman, Jude Nwauzor, said yesterday.

“The election season has slowed down things,” Nwauzor, said.

Nigerians will vote on February 16 in a presidential election where incumbent Muhammadu Buhari is seeking a second term.

“We would advertise for Expressions of Interest from investors after elections and commence the sale process,” Nwauzor said.

Some of Nigeria’s banks have faced tough times since low oil prices put pressure on their business of lending to the oil and gas industry. The country emerged from a recession in 2017 but economic growth remains sluggish and this has weighed on credit growth.

Polaris Bank was set up last year to take over the assets of Skye Bank which collapsed and had its operating licence revoked by Nigeria’s central bank.

Polaris was then transferred to the state-owned bad bank for sale to investors. AMCON has previously sold three other nationalised banks.

The AMCON spokesman said the bad bank was seeking to recover debts owed to Polaris that were non-performing and had asked for proposals on repayment.

AMCON was set up in 2010 to take on non-performing loans from banks as part of the country’s efforts to resolve a financial crisis at that time.

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CBN warns against rising debt, retains rate at 14%

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All 11 members of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) yesterday, voted to retain the Monetary Policy Rate (MPR) at 14 percent and other key economic parameters in its first meeting in 2019.

The Governor of CBN, Godwin Emefiele, who made this disclosure in a communique read at the end of the meeting in Abuja, warned against the nation’s rising debt profile, even as he revealed that the nation’s foreign reserves now stand at $43.28 billion.

According to Emefiele, the Committee deliberated on external borrowing, where it noted the increase in debt level and thus called  for caution.

He said the debt level, if not checked, could rapidly hit the pre-2005 Paris Club level. The Governor said that Committee recommended the Federal Government to sustain the pace towards addressing infrastructure deficit in Nigeria.

On monies being paid by the Finance Ministry in collaboration with the Debt Management Office (DMO) to the oil and petroleum marketers, Emefiele said there was an agreement that the banks would halt interest charges from July 2017 to date on loans they gave oil marketers.

“So, its an agreement we have and any bank who refuses to do so, the petroleum marketer through his association should please inform the Central Bank”, he said.

On output, the CBN Governor said the real Gross Domestic Product (GDP) grew by 1.81 per cent during the third quarter of 2018 from 1.5 per cent during the second quarter of 2018.

“The services and agricultural sector continued to drive output growth. However, the persistence of herdsmen attacks on farmers, cattle rustling and flooding in parts of the country affected agricultural and livestock output.

“The output for growth however remains fragile as the late implementation of the 2018 budget and the residual impact of flooding and security challenges constituted headwinds to growth.

“The committee therefore believes that effective implementation of the 2018 capital budget and the Economic Recovery and Growth Plan and improvements in the security situation and continued stability in the foreign exchange market will enhance aggregate demand and growth”, he added. 

The communique further noted that the committee observed that the near-term risk to inflation remains the impact of flooding on agricultural output, insecurity on food producing belts of the country, exchange rate pass through to inflation due to weakening of oil price and campaign related spending towards the 2019 general election.

On the MTN penalty, he said: “I am glad to tell you in November we held a round of meetings with MTN officials even from South-Africa and by December we concluded those engagements and the matters were resolved. It resulted in notional I repeat it is not a fine, not a penalty,  reversal of $53million amounting to about N19.5billion and this amount has since been paid by the MTN and terms of settlement of the matters have already been lodged at the Nigerian court”.

On the 41 items restricted from foreign exchange, he said the economic department of the CBN together with Economic and Financial Crimes Commission (EFCC) would investigate any company or any individual suspected of bringing these items either through any border or through smuggling of any means for money laundering and economic sabotage.

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