Banking
AMCON Acquires N3.7tr Bad Loans from Banks
**Pumps N2.2tr into 10 Banks
By Dipo Olowookere
Over 12,000 Non-Performing Loans (NPLs) from 22 banks worth N3.7 trillion have been acquired so far by the Asset Management Corporation of Nigeria (AMCON), Business Journal is reporting.
AMCON was created by Federal Government to be a key stabilizing and re-vitalizing tool aimed at resolving the non-performing loan assets.
According to the report, the sum of N2.2 trillion has been injected as financial accommodation to 10 commercial banks in order to prevent systemic failure in the banking sector. This has contributed in stabilising the financial system in Nigeria.
Records from AMCON also indicate that about N3.66 trillion of depositors’ funds were protected since the creation of the corporation during the 2008/2009 financial crisis while approximately 14,000 jobs were saved as a result of AMCON’s intervention in the banking sector.
Meanwhile, leading legal luminaries including the former Chief Judge of the Federal High Court, Justice I. N. Auta and the President of Court of Appeal, Justice Zainab Adamu Bulkachuwa have joined the campaign by the management of AMCON) in calling for a paradigm shift in debt recovery processes in Nigeria.
Such shift according to them would act as act as panacea, if indeed the Corporation were to meet its mandate of resolving its huge outstanding obligation.
Current AMCON management under the leadership of its Managing Director/Chief Executive Officer, Mr Ahmed Kuru, upon assuming office and reviewing the challenges as well as bottlenecks inhibiting recoveries mounted a strong campaign that the current practice where habitual and recalcitrant debtors are treated with kid gloves, especially by agencies of government would not help AMCON resolve these loans before its sunset date.
According to Justice Auta, the approach to debt recovery and resolution must change at this point in the life of AMCON especially going into 2018 and beyond because the Corporation came as a child of necessity at the time it was created with all the good intentions in the world to recalibrate the beleaguered economy of the country at the time.
In his words, “Nigeria witnessed the 2007 global financial crisis, which was caused by insolvency, illiquidity, poor corporate governance and outright financial crimes.
“However, with the creation of AMCON by the federal government, no bank has been liquidated, depositors’ funds are safe and no bank has been subject to collection queues.
“The financial crisis led to the depression in value of the securities created against these defaulting loans thereby leaving the banks with an unfortunate inability to recover their losses.
“The effect of such monumental exposure was that banks were unable to sustain the equilibrium of lending required to maintain a vibrant economy.
“This in turn led to higher interest rates and an inability to perform the bank’s primary functions of financial intermediation like the pooling of savings and lending.”
Explaining further, he said, “In addition to significant reduction in lending to customers, financial crisis created by non-performing loans can result in breakdown of interbank lending, which in turn leads to drastic drop in liquidity of banks and a consequent reticence or direct inability to advance loans to the broader public.
“Collectively, these factors create a vicious cycle resulting in a hike in interest rates; concomitant default and insolvency; volatility of currency values; a drop in investments and general stagnation of the economy among other crisis.”
Justice Auta, having enumerated the facts, argued that it is extremely important for all stakeholders, especially Judges to note the correlation between bank failure, which AMCON saved, and a large concentration of non-performing loans.
He added that Judges have critical role to play in the insulation of the macro-economy from fragmentation since most disputes that relate to banking, which AMCON currently shoulders are presented before them.
Describing the AMCON framework as “extremely complex” he said AMCON’s goal can only be accomplished if all stakeholders, especially the entire hierarchy of the bench appreciates the fundamental underpinnings of its regime.
Lending her voice to Justice Auta’s position, Justice Bulkachuwa in her own analogy argued that since the rise of the financial sector is tied to economic growth, Nigeria’s economy, the livelihood and wellbeing of the citizenry are inextricably related to finance. She said all over the world, whenever the economy goes into crisis, governments across the world intervene to stabilise the macro-economy, which AMCON did in the case of Nigeria.
But with what she described as “deliberate reluctance” of debtors to redeem their obligations to AMCON, Justice Bulkachuwa said: “Having realised deliberate reluctance of debtors to redeem their obligations to AMCON, it would seem that AMCON has limited options other than resorting to our courts to enforce its enormous powers towards debt recovery. To recover as much debt as possible within its defined lifespan, expediency is essential if AMCON is to achieve its value maximization and financial stability goals.”
Corroborating the position of the two distinguished Justices, Mr Kuru submitted that AMCON is currently indebted to the CBN to the amount of N4.7 trillion, which is more than half of the proposed 2018 national budget.
Aside that, more than 70 per cent of AMCON’s Eligible Bank Asset (EBA), portfolio is also locked in one form of litigation or the other meaning that without the support of the judiciary, AMCON cannot see the light of day.
On the back of that, he said there is also a rising number of appeals emanating from trial courts on AMCON cases, adding that at this stage in AMCON’s existence, expeditious determination of appeals brought before the courts remains key to AMCON’s ability to resolve all outstanding assets and prevent the undesired economic consequences of failure to recover the assets. The inability to resolve the debt he argued would have dire implications for the entire Nigerian economy.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
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