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Saturday, December 10, 2022

Shareholders fault CBN’s N453bn levy on banks

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The Central Bank of Nigeria’s tax of 0.5% on commercial banks to support the Asset Management Corporation of Nigeria has been resisted by the Independent Shareholders Association of Nigeria.

The shareholders reported that between 2020 and the first quarter of 2022, commercial banks had already paid levies to AMCON totaling N453.47 billion.

The shareholders noted that the N146.9 billion in levies from commercial banks in 2020, the N180.67 billion in 2021, and the N125.9 billion in the first quarter of 2022 were deductions from the implementation of the 0.5% charges on banks’ total assets on and off-balance sheet imposed on banks.

The shareholders claimed that these taxes by AMCON were hurting the commercial banks’ earnings on investments.

The group voiced their discontent during a news conference that ISAN organized to allay the worries of minority shareholders regarding the ongoingly low returns on investments and the incorrect interpretation of insider credits in banks by the Central Bank of Nigeria.

Sunny Nwosu, Coordinator Emeritus of ISAN, spoke on behalf of the organization’s members and stated that the association’s earlier worries and reservations regarding the formation of AMCON had already manifested themselves in its inability to resolve the debt collection issue.

Remember that the Federal Government established AMCON in 2010 through the Central Bank of Nigeria to handle the non-performing loans in the banking industry?

However, the prolonged low returns on investments and the Central Bank of Nigeria’s incorrect interpretation of insider credits in banks have alarmed investors.

They asserted that the organization, which was established as the Federal Government’s debt recovery agency, has only managed to recover a pitiful N1.4 trillion since its foundation.

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They claim that the “available statistics showed that non-performing loans have again surged by more than 150 percent across the financial industry.

“At the outset of its operations, the agency paid N1.8 trillion to 22 eligible financial institutions (EFIS) for 12,743 non-performing loans or eligible bank assets (EBAS) with a value of N3.8 trillion.

“Equally, the company earned around N327.6 billion from 0.5% charges on banks’ total assets that were levied on nine banks between 2020 and 2021, both on and off-balance sheet items.

The debt collection agency also received N125.9 billion from 12 commercial banks listed on the Nigerian Exchange as part of the sector’s resolution funds in the first quarter of 2022 as part of the CBN’s quick intervention in the bad debts in the banking sector through AMCON.

“During the same period, AMCON bank charges jumped by 29.5% from N97.18 billion paid during the same period of 2021 to N125.9 billion in the first quarter of 2022,” according to the report.

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