Shareholders are worried that the mandatory regulatory levies imposed on banks by the Asset Management Corporation of Nigeria (AMCON) has become a nuisance as it hinders them from getting higher returns.
Investors have unanimously agreed that the corporation has overstayed its welcome and has become a burden since it has not recovered debts as expected.
In the last six years, the biggest banks have paid a combined N1.0 trillion in AMCON Charge, according to data compiled by MoneyCentral.
A breakdown of the numbers shows they collectively paid N269.93 billion in regulatory costs in the first nine month of the year, which is 22.17 percent higher than 2021’s N220.92 billion.
The charge is the second largest expense line after total operating expense that comprises salaries and other operating expenses.
AMCON was established in 2010 to buy the Non-Performing Loans (NPLs) of Nigerian banks to stabilise the banking system and is currently being funded by a combination of loan recoveries, contributions from the Central Bank of Nigeria (CBN), sale of assets pledged, and a sinking fund levied on the banks.
However, shareholders see the resolution costs as a drain on the bottom line of banks who would have paid them more dividend, and they are concerned about losses reported by the corporation despite collecting huge levies from banks and having challenges selling recovered assets from debtors.
Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN), Sunny Nkwosu, said most commercial banks and numerous corporate concerns indebted to AMCON currently struggle to remain afloat in the face of numerous litigations as the corporation appears unlikely to meet its set goals.
“Our conclusion is that the corporation is on the verge of losing the Nigerian tax payers’ money spent in repurchasing critical toxic assets from troubled banks and other entities,’’ said Nkwosu.
“Our position, like we said before, is that AMCON has overstayed its welcome and we urge the CBN to suspend levying commercial banks,’’ adds Nkwosu.
Zenith Bank that has paid N179.39 billion in AMCON Charge in six years saw the levy increase by 16.06 percent to N44.04 billion as at September 2022.
In the last six years, Access Bank has incurred N179.87 billion in regulatory costs, and it saw the charge jump by 27.04 percent as at September 2022.
First Bank Holdings Plc has paid N195 billion as AMCON Charge in Six Years while the charge was up 12.03 percent to N31.18 billion as at September 2022.