Assets Management Corporation of Nigeria says its debt recovery efforts in 2016 yielded N134 billion even as it was able to cut back its stand-alone losses from N310 billion in 2015 to N251 billion in 2016.
The bad bank said it had recovered the amount from cash payments, assets forfeiture and sale of properties.
Speaking during a media parley in Lagos, the Managing Director and Chief Executive of AMCON, Ahmed Kuru, stated that N86.9 billion had been realized from cash payments made by obligors who willingly paid their debts.
He noted that the bad bank also realized N30.46 billion, which is the value of assets which had been forfeited by obligors but which is yet to be converted to cash, while N7.9 billion was realized from the sale of assets and N8.7 billion from share sales.
Giving a summary of the financials of the bad bank, the Chief Financial Officer of AMCON, Mr Olugbenga Ataiyero, said the total comprehensive loss of the corporation rose to N352 billion in 2016 as against loss of N295 billion recorded in 2016.
This he said was due to the burden of its subsidiaries which recorded losses as the losses recorded by the corporation on a stand-alone basis declined in 2016. He explained that AMCON on a stand-alone basis was able to reduce its loss position from N302,2 billion in 2015 t0 N254.34 billion in 2016.
Ataiyero explained that the level of loss is expected to further reduce in 2017 as the burden of Keystone Bank has been taken off its books.
He noted that one of the major loss drivers of the bad bank was the interest expense which includes an interest payment on a N5.7 trillion facility; he noted that with an interest payment of six per cent per annum, AMCON pays N268 billion as interest.
However, the MD, Kuru said while an interest rate of six per cent is a fair deal, it is in talks with the Central Bank of Nigeria (CBN) to see if there can be a further reduction in interest paid on the loans owed to it.
Meanwhile, Ataiyero explained that AMCON made a gain of N27.15 billion on fair value of its unstructured loans while credit loss expense reduced by about N37 billion between 2015 and 2016.
Likewise, fair value loss on its propriety properties reduced from N20.26 billion to N116 million.
Other operating income of AMCON also increased by about N14 billion from N13.157 billion to N27.5 billion in 2016.
He said the corporation was also able to manage its other operating expense downward by almost N8 billion from its several cost saving measures.
Operating expense was down to B15.8 billion in 2016 from N23.3 billion recorded in 2015.
He noted that the amount that came into the sinking fund was lower than expected as the projection 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. So, that was enough for us to pay down the principle. What we did was just to service the interest of our loan from the CBN. We pray that the contribution to the sinking fund would improve and then our losses would begin to go down.
“The contribution from the sinking fund, it would have been much better for us as an entity if it came in through our profit and loss account. But that was not the case. We argued with our auditors and they said it can only go into the reserves.”