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The banking sector resolution cost is becoming a heavy burden for banks as it has contributed to deteriorating return on equity (ROE), which validates shareholders’ call that the Asset Management Corporation of Nigeria (AMCON) be scrapped.
Zenith Bank Plc, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO) Plc, Stanbic IBTC Holdings and FirsHoldco Plc, collectively incurred N400.39 billion as AMCON levy in the first six months of 2025, according to data gathered by MoneyCentral.
Banking sector resolution cost represents Asset Management Corporation of Nigeria (AMCON) levy, which is applicable on total balance sheet size of the Bank. The current applicable rate based on AMCON Act of 2015 is 0.5% of total assets plus total off balance sheet assets.
Zenith incurred AMCON charge of N143.83 billion; United Bank for Africa, (N92.88 billion), FirstHoldco, (N74.84 billion); GTCO, (N50.82 billion) and Stanbic IBTC (N38 billion).
Investors have complained that rising AMCON charge is eating deep into distributable profit and dividend paid by lenders who no longer enjoy free money such as foreign exchange revaluation gains.
For the first six months through June 2025, GTCO’s profit after tax (PAT) dipped by 50.41 percent to N449.01 billion from N905.56 billion as at June 2025.
Zenith Bank Plc reported a 8% slide in profit after tax to N532 billion in the half year period to June 2025, compared to N578 billion as at June 2024.
UBA’s half year 2025 results showed that profit before tax dropped from N401 billion in 2024 to N388 billion in the period under consideration.
Some analysts are doubting the integrity of AMCON, a corporation whose operations are clandestine as it no longer publishes its financial statement anymore and perhaps more worrisome, the public don’t know how it spends the money it collects from banks.
Zenith Bank will be paying close to N300 billion in resolution charge by year end.
“Imagine what lenders could do if this levy disappeared. N800 billion could fund thousands of small medium enterprise (SME) loans, mortgages and consumer credit facilities,” said an analyst who doesn’t want his name mentioned because of the sensitiveness of the matter.
“It could support lower interest rates, easing the cost of borrowing for businesses and households. And it could reward shareholders with stronger returns,” said the analyst.
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