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AMCON assures banks over loan period

11 June 2014, 20:19

Lagos - The Asset Management Company of Nigeria (AMCON) has reassured banks under its debt recovery administration that contributions to the sinking fund would not exceed beyond the repayment period of their loans.

AMCON spokesman, Kayode Lambo, gave the assurance during an interactive session with newsmen in Lagos.

Lambo said that banks would not contribute to the sinking fund beyond the 10 years when AMCON assignment would have been completed.

He said that the loan (bond) was used to rescue the banks during the financial crisis that affected the financial industry in 2008.

“Contributing to the sinking fund stops immediately the loans are paid back.

He said that AMCON had already retired N1trillion in 2013 out of the N3.8trillion it owed, while it expected to redeem N800 billion in 2014.

Some shareholders have repeatedly claimed that commercial banks’ contributions to the sinking fund had eroded their dividend.

The sinking fund was set up to assist AMCON to meet its goals and also ensure that government will not bear the cost of financial crisis.

Under the sinking fund arrangement, each bank contributes 0.5 per cent of its total assets and another 0.5 per cent of 33 per cent of their off balance sheet items to the sinking fund.

On the divestment from the bridge banks, Lambo said that the corporation decided to start with Enterprise Bank and Mainstreet Bank, stressing that Keystone would be sold last.

AMCON had put Enterprise Bank up for sale last year and had attracted 18 bidders including foreign and local investors, while the same process is on-going for Mainstreet Bank.

-         NAN

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