By Ademola Alawiye

If everything goes as planned at the Extraordinary General Meetings of the five rescued Deposit Money Banks that have yet to conclude their recapitalisation deals, the Asset Management Corporation will inject fresh N800bn into them.

The Managing Director, AMCON, Mr. Mustafa Chike-Obi, said in Lagos on Monday that the corporation would do so if their shareholders approved the various merger agreements during their Extraordinary General Meetings.

He said, “The job of AMCON in the five banks now is to recapitalise them to ground zero before the core investors take them to adequacy level. If the EGMs are successful, we will inject an estimate of N800bn in the five banks to recapitalise them to level zero before the core investors put in their cash that is expected to take them to adequacy level.

“However, if the EGMs are not successful, we are looking at a total of N1.3tn. Our total estimate is N1.5tn if the EGMs are successful, while we plan N2tn if the EGMs are not successful.

“Meanwhile, we have already invested N700bn in the three nationalised banks. Right from the whole process, we have spent about N1.7tn actual money which translates to a bond of N2.4tn (face value). These include all non-performing loans bought in all the banks and the investment in the three nationalised banks.”

Chike-Obi, however, pointed out that the money was at no cost to taxpayers, saying that the 23 banks in the country had decided to put aside 0.3 per cent of their total assets yearly to a sinking fund to solve and avoid future problems in the banking sector.

He added that the corporation might raise its bonds to N4.5tn even though it would not expect to spend that much.

Chike-Obi said, “We are raising our bonds to N4.5tn but we may not use everything.

“AMCON now has shares in all the banks. Our shareholding in all the banks will range from 10 per cent to 100 per cent depending on what happens at the EGMs. We are not interfering in the day-to-day management of the banks, and we have not told them who to hire.”

He further said that the corporation would exit the nationalised banks by 2013.

He said, “AMCON is not a regulator, we don’t have regulatory powers.

“Our function as an institution is to stabilise the financial system.”

Although, AMCON has stepped in, we expect to get our money back through the sale of these shares and hand them over to new investors.

“We are not rushing things but we want the process to be as fast as possible. In the next two years, we should hand these banks to new owners. Already, 20 banks have shown interest. Fifteen foreign and five local banks have indicated interest in the nationalised banks.”

AMCON had earlier injected about N679bn into the three nationalised banks. The funds, which translate to a total bail-out package of N1.299tn when the initial N620bn injected in 2009 is added, will bring the three banks to the required capital adequacy level for their operations.

Source: Punch