AMCON’s stake in banks, others worth N100bn – Chike-Obi

The Asset Management Corporation of Nigeria, the bad debt manager created to acquire non-performing loans of banks in the aftermath of the 2009 banking sector crisis, still has shares worth over N100bn in Deposit Money Banks and other companies, its Chief Executive Officer, Mr. Mustafa Chike-Obi, has said.

He listed some of the banks in which the corporation has shares as Access Bank Plc, Diamond Bank Plc, Sterling Bank Plc, Unity Bank Plc and Wema Bank Plc.
AMCON’s intervention in the banking sector in 2009 followed the discovery of huge toxic assets in the banks’ books, a situation that led the bad debt manager to convert some of the NPLs to shareholdings in the affected banks.

Chike-Obi told our correspondent in an exclusive interview on Tuesday that AMCON would sell its shares in the banks “as soon as it is practicable.”
“We hold shares in banks as an intervention and we will get rid of them as soon as practicable,” he said.
The CEO, however, stated that some things had to be in place before AMCON could decide to sell the shares.

“There are things that have to be in place. You have to check the market; you have to check if the bank is in solid footing, you have to check many things to ensure they are in place before you start selling your shares,” he added.
Aside from these, Chike-Obi said the need to meet some mature obligations was another factor that might compel the agency to sell its shares in the banks and other companies.

AMCON had last year sold its 20 per cent stake in Union Bank to Atlas Mara, a financial investment institution managed by a former Managing Director of Barclays Bank, Mr. Bob Diamond. The corporation also sold its shares in Ecobank Transnational Incorporated to a bank in the Middle East.
Justifying the sale of the shares, the AMCON boss said the shares in the two banks were relatively smaller compared to its stake in Wema Bank and Unity Bank.

He said, “In those banks (Union Bank and Ecobank), we had a much smaller percentage compared to what we have in Wema Bank and Unity Bank. It was easier for the shares to be sold because of the ownership.
“I believe we are in majority in Unity Bank at this point and we are near majority in Wema Bank as well; so, it is a different cup all together. And we will sell them as soon as practicable.”

Highlighting other reasons the bad debt manager might chose to sell its stake in other banks, Chike-Obi explained, “We are holding shares worth at least N100bn in total in banks and other companies. We are holding them because we believe in the long-term viability of the capital market.

“Last year, we needed to sell shares (including that of Union Bank and ETI) in order to redeem our bonds.”

On the possibility of another AMCON intervention in the banks following the reported rise in their NPLs, he said that might be difficult because all the principal parties, including the Presidency, Ministry of Finance, the Central Bank of Nigeria and AMCON must agree before it could happen.

He, however, noted that the rise in the NPLs had yet to reach an alarming state that would call for another intervention.
“Well, I don’t think that the rise in the NPLs is dramatic; it is a marginal rise and it is manageable. I don’t think Nigerians need to be concerned about the NPLs at this point. It is good to be ahead of it rather than behind it,” he explained.

On the divestment of AMCON from Keystone Bank, the last of the three nationalised banks, Chike-Obi said the decision would be reached after its board meeting and a briefing session with the new President, Muhammadu Buhari.

AMCON had last year divested its 100 per cent stake in Enterprise Bank and Mainstreet Bank, two of the three nationalised financial institutions.
On the picketing of AMCON’s Abuja office by workers of an oil firm, Seawolf, on Monday, he said the agency was not owing the protesting workers and as such, would not pay them anything.

Chike-Obi said, “We are only trying to get out money from Seawolf just like the way the workers are trying to do. AMCON has not taken over the management of the company. We don’t have any business with the workers. The workers were even employed by an agency called OMS.

“AMCON went to take over Seawolf’s assets, which it bought with depositors’ money. Our intention is to hold on to those assets until we are able to get the money. So, picketing AMCON’s office is a subtle blackmail. It won’t work with us. We have talked to them; we have explained the situation to them.”

[Punch]