Nigeria banks are the healthiest in the world- AMCON CEO
The Chief Executive Officer of the Asset Management Company of Nigeria (AMCON), Mustapha Chike-Obi on Monday said that the banking crisis in the country is over and that the sector should see a substantial recovery when results come in for the first quarter of this year.
AMCON was set up in 2010 to clean up the banking system in Nigeria following a $4 billion rescue of nine banks that came close to collapse.
Speaking to the Reuters Africa Investment Summit in Lagos, Mr Chike-Obi said earnings in the banking sector would recover well in the first quarter of 2012, after suffering last year because of write-downs on bad debt.
“The numbers we’re seeing in the first quarter are very robust,” he said, adding that three nationalised banks were all now profitable.
“We should wait to the second quarter of this year before passing judgment — I will not tell you that nothing surprising can come up — but the banking crisis of 2007-2009 is over”.
The banking sector was the second worst performing index on the local exchange in 2011, falling 32 per cent, with only oil and gas doing worse.
Seven out of 15 banks listed on the Nigeria stock exchange have announced 2011 earnings, with most posting higher-than-expected loan losses. FCMB has reported a loss while UBA issued a profit warning.
Diamond Bank also reported a loss last year, but swung back to profit in the first quarter.
“Nigerian banks are now the healthiest banks in the world in terms of asset quality and capital,” Mr Chike-Obi said.
He said AMCON was now the largest institutional holder of Nigerian bank stocks “And we’re happy to hold them. We’re not selling.”
AMCON plans to refinance its N1.7 trillion three-year bond with maturities of somewhere between seven and 10 years when the debt expires next year.
The AMCON boss said they were not yet at the stage of seeking investors for the bond, and that a preliminary roadshow in New York, Boston and London next month was more about explaining what asset company is doing than marketing new debt issues.
He said that within four to six weeks AMCON would appoint advisors for the sale of three banks nationalised after a bail out, though it will six months before recommendations are expected.
He said AMCON’s aim was to gradually reduce its operations and cut staffing in the next five years, as a full banking recovery makes it no longer needed.