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Shareholders Lament N53.52bn Banks’ Levy to AMCON

 Eight commercial banks contributed N53.52 billion to the Asset Management Corporation of Nigeria’s (AMCON’s) sinking fund in 2013.
Checks by the News Agency of Nigeria (NAN) indicated that the banks were Zenith Bank Plc, Union Bank of Nigeria Plc, Skye Bank Plc, United Bank for Africa (UBA) Plc and First City Monument Bank.

Others are FBN Holdings Plc, Sterling Bank Plc and Diamond Bank Plc.
The Central Bank of Nigeria (CBN) and the banks in 2011 had signed a Memorandum of Understanding (MoU) for the establishment of a sinking fund.

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

Under the initial arrangement, the CBN contributed N50 billion, while commercial banks contributed an amount equivalent to 0.3 percent of their total assets each as at the date of their audited financial statements and annually for 10 years.

But this was raised to 0.5 per cent of the banks’ total assets and 33.3 per cent of off-balance sheet assets into the fund last year.

A breakdown of the figures contained in the commercial banks’ 2013 annual reports obtained by NAN showed that FBN Holdings paid the highest levy of N13.85 billion during the review period.

It was followed by Skye Bank with N10.35 billion, while UBA paid N9.67 billion.

Also, Zenith Bank paid N4.81 billion, FCMB contributed N4.58 billion, UBN paid N4.43 billion, and Sterling Bank parted with N3.11 billion, while Diamond paid N2.72 billion.

Speaking on the AMCON levy, the President, Independent Shareholders of Nigeria, Mr Boniface Okezie said the levy robbed shareholders of their investments.

Okezie said that AMCON should be scrapped or be funded by the federal government.

He said that shareholders should not be short-changed because of the AMCON levy to the detriment of dividends.

According to him, some of the banks contributions were higher when compared with the dividends they paid shareholders.

He attributed the non-payment of dividends by some banks and the poor profile of some of the banks to the “fraudulent AMCON’s levy”.

On his part, the Secretary, Independent Shareholders Association of Nigeria, Mr Adebayo Adeleke described AMCON as a disincentive to the nation’s investment terrain and a major setback to the nation’s retail investors.

Adeleke said that “AMCON collects 0.5 per cent of banks total assets every year, while banks and their shareholders are struggling to survive."

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