Chike Obi, managing director, Asset Management Company of Nigeria (AMCON) has said that the have foreclosed further purchase of non-performing loans from the nation’s deposit money banks as their current ratio to risk assets is well below five per cent.
Obi who disclosed this at an interactive session with the media, in Lagos yesterday, however said that the system has been strengthened to mitigate the crisis it is currently battling with.
According to him, it is almost impossible now for banks to avoid examiners’ searchlight in dictating the unethical practices and poor corporate governance issues that reigned before now.
He pointed out that any record of increase in risk assets by a particular bank now, will as well be adjusted by the bank within the quarter of its operations, assuring that risk management in financial institutions has been firmed up.
“Besides, from the regulator to other stakeholder, including AMCON’s board and management, have agreed that there will not be further purchasÅe of non-performing loans. I am sure that it will not happen when I am still the Chief Executive of the institution,” he said.
Chike-Obi pointed out that the misconception over the sinking fund and attributing of its assets as public fund have also attracted the attention of the organization.
He stated that the sinking fund is deposited with the Central Bank of Nigeria and managed by same, in the settlement of banks’ liabilities, adding that AMCON has no link with the fund, not even the total pool so far.
He also noted that AMCON’s assets are factored into the total cost of non-performing loans, which the banks, together with the funds to be recovered will offset, saying that public funds can only arise from the excess that might result, when the bonds are totally redeemed.
Chike-Obi reiterated that the intervention was ultimately in the interest of the banks and the economy, challenging any of the nation’s lenders to prove his claims wrong by showing evidence that they were better off before the bailout.
He pointed out that the intervention not only benefited banks, but also companies and private sector initiatives that would have collapsed and throwing more thousands into the labour market.
Chike-Obi, said the $31 million aircraft, currently being priced $28 million, would be represent a $3 million loss, adding that the loss was not deliberately incured.
It would be recalled that AMCON put down $27 million to complete the transaction on the aircraft, initiated by an undisclosed debtor of a bank, a move that was aimed at getting a hold on the initial deposit of $4 million made to the seller by the debtor.
The decision was made when it was obvious that the manufacturer would not release the $4 million already deposited and there was no other asset to lay hold on from the debtor.
The AMCON chief, who admitted that the decision was a costly mistake, explained that the agency did not envisage the unfolding difficulties that now hamper the smooth sale of the Jet, after the injection of the huge sum.
He also debunked allegations of serious infractions at Mainstreet Bank- one of the bridged banks, saying that if there is any, he is not aware and that the CBN’s Banking Supervision Department would have also raised alarm.
“We must take every allegation with a sense of responsibility. For me, I am not aware of any serious infractions and do not think there is
Speaking on the continuous operations of the bank’s subsidiaries, he said the regulator decided to let it remain operational until the new investor is unveiled to decide what to do with them.