The Managing Director, Asset Management Corporation of Nigeria, Mr. Mustafa Chike-Obi, tells OYETUNJI ABIOYE that the bad debt manager is not in a hurry to sell its shares in banks, among other issues

When will AMCON commence the process of selling Keystone Bank, which is the last of the three nationalised banks?

There is no specific date. We will have a board meeting and we will discuss that at the meeting. The board decides everything.

As the CEO, do you have any specific timeline in mind?

We will sell Keystone Bank as soon as practicable. A new President has just been sworn in. He has to be briefed. Let us give him some time. It is not a do-or-die affair.

Non-performing loans are on the rise. The CBN has directed Deposit Money Banks to publish the names of chronic bad debtors on August 1. What can we do to mitigate the trend in NPLs?

Well, I don’t think that the rise in NPLs is as dramatic as you make it sound. But then it is a marginal rise and it is manageable. I don’t think Nigerians need to be concerned about NPLs at this point. It is good to be ahead of it rather than behind it. I don’t think there is any dramatic rise in NPLs neither should it be a concern to Nigerians at this point.

What is your opinion about the adoption of Basel 2 and Basel by Nigerian banks?

The regulation of banks in terms of their capital adequacy is the function of the CBN. AMCON does not regulate banks. As any responsible body, we believe the banks are adequately capitalised but the issue of Basel 2 and Basel 3 is not in our purview. Capital adequacy of banks is really the functions of the CBN.

What are your plans about your shares in Unity Bank, Wema Bank and other banks?

We will continue to hold shares in banks as an intervention and we will get rid of them as soon as practicable. That has been our focus from day one. We are not actively managing these banks. They have good managements, they have boards. And if they have any capital raising to do, that will be decided at the at board and management; and we will support them if we can.

You said you would dispose off your shares in Unity Bank and Wema Bank as soon as practicable. How do you mean?

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.

AMCON sold its shares in Union Bank to Atlas Mara, its shares in Ecobank Transnational Incorporated to some foreign investors. What are the things in place in these banks that are not yet to be in place Wema Bank and Unity Bank?

First of all in those banks, we have much smaller percentage compared to what we have in Wema Bank and Unity Bank.

How much shares do you have in Wema Bank and Unity Bank?

I don’t know off hand now but what I know is that it is higher compared to what we have in Union Bank and Ecobank Transnational Incorporated. It was easier to be sold because of the ownership. I believe we are 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.

Are there other banks you have shares aside these ones?

Yes; we have shares in many other banks. We have shares in Sterling Bank Plc, Diamond Bank Plc, and Access Bank Plc, among others.

Some of these shares you have in the banks happened as a result of your intervention in the banks. Don’t you think it is good you have a specific timeline on the sales of the shares?

When somebody wants to buy something we have and they have a good price, and we feel it is right time to sell, we will sell. You may not think it is time to sell those shares. We have other shares; we have shares in Mobil and many other companies. We are an asset management company. It depends on when it is the right time to sell these assets. We will sell when the time is right.

How much worth is your total shareholding in all the banks?

We are holding shares worth at least a 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 so that we can redeem our bonds. We don’t have a bond redemption imperative this year like that of last year. So there are many factors that lead to the late decision in sale of shares. Even you as an individual, I am sure sometimes you may have to sell some of your shares to pay the school fees of your children; at other times, you hold the shares. So the decision will have to be made in the interest of everything you have to do.

The workers of an oil and gas company called Seawolf picketed your Abuja office recently. What are you doing about it?

We are only trying to get out money from Seawolf just like the way the workers are trying to do. We don’t have any business with the workers. AMCON has not taken over the management of the company. We have only taken over the assets (including the car that the man bought with our money). Nothing is going on in Seawolf in the past one year-it is really like a defunct company in terms of assets. We went to take over Seawolf’s assets which they bought with depositors’ money. Our intention is to hold on to those assets until we are able to get the money.

Picketing our Abuja office is an abuse of union. The workers should go and collect their money from Seawolf or whoever their agent is. We are not their agent. Picketing AMCON’s office is a subtle blackmail. It won’t work with us. We have talked to them, we have explained to them.

Banks’ profit margin has been on the downward trend. This has been linked to AMCON’s levy and CBN policies. Can you react to this?

I am glad you raised this. First, you made a lot of assumptions. In 2010, banks profit was negative. In 2011 after AMCON came in, banks’ profits were marginally profitable. In 2012, they were profitable; 2013, they were very profitable. In 2014, they remained very profitable.

There is no doubt that the impact of AMCON has made banks very profitable. And so, I am always amused when people are complaining about AMCON levy. Without AMCON, most of those banks would be dead. They would not be existing nor operating today. It is like you are terminally sick and you go to the doctor, and the doctor cures you and you don’t want to pay the medical bill. The AMCON levy is a good thing, the banks caused the crisis and they have to pay for it. And this way is the best way they could have paid for it otherwise they would have been in terminal case right now. So I am not worried about that.

As for the CBN policies, what they are doing will make the banks very profitable. They don’t want them to make money here and something happens and they crash down to zero. So what the CBN is doing is to make them have sustainable profit. It is not that they will make 30 per cent this year and down to 20 per cent next year. All they are trying to do is to create a sustainable banking industry. Sometimes, these policies may appear as if they are slowing down profit but in the long run, they will all be good for it.

What do you think about the economy?

It is very important for Nigeria to grow its economy much faster than it is running now. I think a rapid economic growth will solve a lot of problems for Nigeria. It will solve security problems, unemployment problems and very many social problems. I think that we should all have our hands on deck to make sure that our economy is put on the fastest growth path we can find. If we do that, we will be fine.

Source: Punch