Six commercial banks have made payments totaling N155.45 billion into the sinking fund of Asset Management Corporation of Nigeria (AMCON) within three years, the News Agency of Nigeria (NAN), reports.
NAN reports that Access Bank, GTBank, United Bank for Africa (UBA), Fidelity Bank, FCMB Group and Sterling Bank made the payments between 2015 and 2017.
Data obtained from the banks’ annual reports showed that Access Bank paid the highest amount of N39.59 billion: N12.06 billion in 2015, N12.06 billion in 2016 and N15.47 billion in 2017.
It was followed by GTBank which paid N35.09 billion: N10.63 billion in 2015, N11.39 billion in 2016 and N13.07 billion in 2017, respectively.
UBA contributed N34.85 billion: N11.08 billion in 2015, N11.08 billion in 2016 and N12.69 billion in 2017.
NAN also reports that Fidelity Bank paid a total of N18.60 billion, being N5.94 billion paid in 2015, N6.16 billion in 2016 and N6.50 billion in 2017.
FCMB Group accounted for N16.94 billion, N5.66 billion in 2015, N5.62 billion in 2016 and N5.66 billion in 2017, while Sterling Bank contributed N12.38 billion, N4.13 billion in 2015, N4.04 billion in 2016 and N4.21 billion in 2017.
NAN reports that the Central Bank of Nigeria (CBN), on January 1, 2011, signed an agreement with banks operating in the country to establish the AMCON sinking fund.
The agreement required the CBN to contribute N50 billion and the banks an equivalent of 0.3 per cent of their total assets as at the date of their audited financial statements, annually for ten years.
However, the contribution, a non-refundable levy on all banks in Nigeria, was increased to 0.5 per cent in 2013.
The fund does not represent any ownership interest, neither does it confer any rights or obligations (save to pay the levy) on the contributor.
The money from the fund is used to purchase federal government securities and the returns from the investment is redistributed among the contributing banks.
The sinking fund has, however, attracted opposition from shareholders of many banks who have called on the federal government to scrap it to enhance shareholders return.
Specifically, Boniface Okezie, National Coordinator, Progressive Shareholders Association of Nigeria, called on the federal government to wind down AMCON.
Mr Okezie told NAN that shareholders had been shortchanged by the corporation, and that the contributions to the sinking fund would have translated to huge dividend to banks’ shareholders.
He said shareholders would resort to court action if government elongated the lifespan of AMCON.
“If governement dares us and elongates the lifespan of the corporation, we will go to court to challenge the decision when the time comes,” Okezie said.
Also, Moses Igbrude, Publicity Secretary, Independent Shareholders Association of Nigeria, said AMCON was an emergency toxic vehicle established by the government through the CBN and stakeholders then to save the situation at hand.
Mr Igbrude said the government needed to evaluate the performance of AMCON to ascertain if it met the expected set goals.
He noted that the corporation’s objective was to buy banks’ toxic assets to stabilise and to avoid the collapse of the financial sector.
According to him, the corporation’s focus now should be how to evaluate and give account of what it has done and wind down and not to seek extension.