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The
Central Bank has said that work is going on between regulators and
operators for the smooth running of the Asset Management Company
(AMCON), just as legislative process is progressing too, said Mohammed
Abdullahi, the bank’s spokesperson. This is coming shortly after
confirmation hearing by the Senate for the corporation board members.

Mr.
Abdullahi said that even without the constitution of the board
management of the company, work is going on and a lot have been
achieved in the area of confirming and verifying non performing loans,
discussions on parametres for the non performing loans of the rescued
banks to be taken over or absorbed, and other issues that are crucial
for the initial take off of AMCON.

“Like you are aware, the AMCON bill has been passed by the National
Assembly a couple of months ago and the Central Bank, together with the
federal Ministry of Finance, have worked on the nomination of the
leadership of AMCON, which has been passed to the president, and the
president has passed the nominees to the National Assembly to screen,”
he added.

“The
latest development we got on Tuesday was the screening of the nominees
by the committee set up by the Senate and based on the information
available to us, they have scaled through. So what remains now is for
the committee to submit the report to the Senate and then as soon as
the approval is granted, they could now be sworn-in to take over their
respective offices,” Mr. Abdullahi said.

Experts still hopeful

Experts
said the steady progress of AMCON, a resolution trust vehicle primed to
purchase toxic assets from banks, will provide the basis for any
meaningful merger and acquisition talks and the eventual
re-consolidation of the Nigerian banking sector.

Renaissance
Capital, an investment bank, said the bill will bear heavily on the
outlook of the equity market and the Nigerian economy at large.

“We
believe that a certain level of confidence will be restored in the
Nigerian financial system following this new development,” it said.

As
stated in the AMCON Bill 2010, its objectives are to assist eligible
financial institutions to efficiently dispose of eligible bank assets,
in accordance with provisions of the Act; and obtain the best
achievable financial returns on eligible bank assets or other assets
acquired by it in pursuance of the provisions of the Act.

The
move to create an Asset Management Corporation was imminent, following
shocking revelations by the Central Bank special audit of toxic assets
estimated at over N2.0 trillion in the banks’ books resulting in
startling levels of loan loss provisions on account of stock market
losses, oil trading, and real estate.

In
July, President Goodluck Jonathan signed into law legislation creating
the company. With bad loans off their books, banks are more likely to
resume lending in an economy where credit has been tight since last
year’s bail-out of nine undercapitalised lenders.