The Asset Management Corporation of Nigeria (AMCON) bank has reported a 2.37 trillion naira ($15 billion) loss after tax, shedding light on the scale of the 2009 financial crisis.
Revealing the losses in Lagos today, AMCON also claimed that 2.1 trillion naira ($13.3 billion) of the losses stem directly from the writedown of bad debt taken on by the bank in 2010, on its creation.
Nigeria in 2009 experienced a banking crisis of unprecedented scale, with nine major lenders amassing such debts that the sector would have crumbled were it not for a bail-out from the government; bail-out funds contributed at the time climbing as high as $4 billion.
AMCON was thereafter launched in 2010 as part of the government’s bid to save Nigeria’s economy; AMCON taking on the bad debt of the financial sector. The company today claimed that taking on the bad loans in 2010 had saved the country from financial collapse, and had saved the banking sector from being hit by 4.7 trillion naira ($29.8 billion) of direct losses, as well as an additional 10 trillion naira ($63.4 billion) in indirect losses.
The asset management organisation further revealed today that of the bad debt taken on in 2010, 85 billion naira ($539 million) has been recovered to date.
Since the 2009 crisis Nigerian banks have been contributing money towards a fund intended to refinance bad debts, with 60 billion naira ($380.4 million) already having been contributed. AMCON added today that the banks had reached an agreement to raise this figure to 100 billion naira ($634.1 million) through additional contributions to be made.
Following its inception, AMCON first nationalised a number of banks; however, it has since embarked upon an initiative to privatise three of those banks in a bid to gather finances. AMCON today announced that the privatisations are expected to be concluded by 2014, thus a financial injection can be expected at that point.