By   Ayodele Aminu and Collins Nweze

The Asset Management Corporation of Nigeria (AMCON) has said that none of the 10 banks rescued by the Central Bank of Nigeria (CBN) will be nationalised, despite huge investments the corporation has staked in them.

AMCON Managing Director Mustafa Chike-Obi said although the Corporation’s stake in rescued banks is from zero to over 50 per cent, the long term target is to hand over the banks to new investors after recapitalisation.

The rescued banks are Intercontinental Bank Plc, Oceanic Bank Plc, FinBank Plc, Bank PHB Plc, Afribank Nigeria Plc, Equitorial Trust Bank, Union Bank of Nigeria Plc and Spring Bank Plc. Others, which have since recapitalised, are Unity Bank Plc and Wema Bank Plc.

To make these banks, which had negative capital after the joint examination by the apex bank and the Nigeria Deposit Insurance Corporation (NDIC), attractive to investors, AMCON absorbed their non-performing loans and inject cash by a way of government guarantee bonds.

Speaking in an exclusive interview with The Nation, the AMCON boss said that its equity is zero in Wema Bank and Unity Bank after both institutions recapitalised.

For other banks in which the corporation has equities, he said, AMCON will pull out or become a minority holder, after they have found new partners or investors.

“There is no nationalisation of banks. There is no desire to do so. AMCON has no desire to run or own any bank. We will exit at a good time to maximize recovery. We will exit in a very public way by announcing how we are going to exit. We will publish it, and we will do it in a way that will not affect the market. When we get rid of our stakes, it will be done publicly and in a very transparent manner,” Chike-Obi said.

The AMCON boss had said the corporation had cleared all bad bank loans and was on track to recapitalise lenders rescued in a $4 billion bailout 18 months ago by the end of the second quarter.

The corporation issued N600 billion worth of bonds to 22 lenders to absorb all remaining non-performing loans, in addition to the N1.03 trillion it issued on December 31, last year. The AMCON boss had said it intended to complete the issuance by Wednesday. This will see it list N1.7 trillion bonds backed by government guarantees on the Nigerian Stock Exchange.

He said that since the loans were acquired end of December, the corporation has not yet begun recovery. “We intend first to look at all these loans on a case-by-case basis, talk to the debtors, and see if we can restructure these loans.

It’s only after we discussed with debtors that we can then decide which loans will perform, which loans we should restructure, and which loans we have to basically classify for closure. Only after we have done these can we say we have started recovery process. It’s a long term process, and I think that to focus on how much we recovered at this point defeats the process,” he said.

The AMCON boss explained that what the corporation did was to inform the banks that they should continue with recovery as they have been doing until the AMCON can take control of the process directly.

He said that in buying a loan, AMCON had a loan purchase agreement where banks agreed to continue to act on its behalf up till six months before the loans are brought in-house for the corporation to manage.

Consequently, he said AMCON has not hired any bank, but only instructed them to continue what they have been doing. “Any recovery that comes through that process will be, of course, very welcome. But we have not made any special effort to hire anybody to recover these loans,” he stressed.

AMCON, Chike-Obi said, will sit down with each borrower and understand what the true situations are and see how it can get the maximum recovery. “In some cases, we have to seize assets; in some cases, we can restructure the loans, give those longer terms. In some cases, and we can even give them more money to get their businesses going better,” he said.

Chike-Obi said there is no high profile debtor connected with government for which anybody has interfered with AMCON, explaining that the corporation has been unilaterally doing what is best in these cases. “We haven’t had any pressure from anybody in government to do anything that we think is not proper. When we get there, and anybody puts pressure on AMCON, we will make sure we resist them. Our job is pretty clear – to get the maximum recovery for the government. And that’s what we are doing,” he said.

He said that AMCON has paid too much for some of the loans it bought from banks even as some of these institutions think it has paid little. “It is normal reaction when you do transactions between two people, that both parties always think they could have gotten more.

Its normal; it doesn’t trouble us. We published our valuation methodology. We published and everybody saw it. We live by that valuation methodology. In some cases, people are going to feel that they could have gotten more. In some cases, we think we have paid too much,” he explained.

Source: Nation