Business
Shareholders To Recover Lost Investment
Shareholders hitherto relegated to the background in preference for saving depositors’ fund will soon recover their lost investment as the Senate Wednesday finally passed the harmonised Asset Management Corporation (AMCON) Bill.
A statement signed by Mohammed Abdullahi, head, corporate communications of the apex bank said “”the ministry of finance and the Central Bank of Nigeria remain convinced that with the setting up of this corporation, the nation is close to a final resolution of the banking crisis and the repair of bank balance sheets. Also, AMCON will ensure that shareholders recover part of their lost investment and assist in reducing the debt overhang that has slowed down the recovery of the capital market”.
Investors will be particularly pleased to see their investments recouped after a year of steep downturn at the nation’s capital market.
Afrinvest Research estimated that non-performing loans, otherwise referred to as toxic assets worth over N1.0 trillion have been drowned in the rough waters that hit the financial market early last year, with the stock market investors incurring substantial losses.
But with the passage of the AMCON Bill, the toxic assets will be bought over, thus allowing the markets – money and capital – some growth space.
“We also reiterate that the soak up of toxic assets will bear heavily on the outlook for the distressed banks in particular, and for equities in general, as banks remain quite reluctant to create new risk assets (after huge provisions made for bad loans)”, said Afrinvest in its first quarter review.
Abdullahi said the AMCON is a multi-purpose resolution vehicle that is empowered to purchase non-performing assets from banks as well as inject needed capital in the form of appropriate securities (Tier 1 or Tier 2). In the case of distressed banks, AMCON will therefore play the key role of facilitating mergers, acquisitions or capital injection by new investors. The boards of directors of the banks have led and reached an advanced stage of discussion with interested parties.
The bill is expected to be submitted to President Goodluck Ebele Jonathan for assent after which it becomes an Act of the National Assembly. This will pave way for the formal establishment of the corporation as a principal vehicle for recapitalisation of troubled banks. It would be recalled that the AMCON bill was tabled by the executive branch and, therefore, an expedited assent is expected.
Wale Abe, chief executive of the Financial Market Dealers Association of Nigeria (FMDA), told The Tide’s source an interview that the development will bring about improved liquidity situation in the system, as well as reduce the burden that was almost crippling some banks, particularly the rescued ones. This will also ensure that the banks become slimmer to be able to function properly.
Abe said he expects either the AMCOM or the central bank to come out with guidelines that will help establish proper pricing for the toxic assets to allow for seamless take-off of the vehicle that is expected to bring succour to the financial industry.
Razia Khan in her recent report titled On-The-Ground (OTC), Nigeria – Assessing Inflation Risk, said though the decline in the growth rate of private-sector credit preceded the bank rescue, record levels of provisioning across the banking sector last year may have taken heavy toll.
“Banks are risk averse and still cautious about new private-sector exposure”, she said. She however expects the situation to turn around once AMCOM is operational and banks have been relieved of their non-performing loans.
Credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, signifying a positive balance of N2.22 trillion month-on-month.
Year-on-year, the figure represents a nine per cent increase compared with the N76.13 trillion recorded in June 2025. The latest figures come as the CBN continues to balance efforts to control inflation with the need to support economic growth and expand credit to businesses.
The CBN data shows that credit to Nigeria’s private sector increased by approximately 2.74 per cent month-on-month between May and June 2026. Also, the CBN data noted that credit to the government fell slightly to N40.03 trillion from N40.38 trillion. Other assets, net, dropped to N10.76 trillion from N12.63 trillion.
The credit surge signifies sustained growth in lending to businesses and other private-sector borrowers during the month. The rise in private sector credit was recorded alongside an increase in net domestic credit, despite declines in credit to government and other assets.
Further analysis of the report says that compared with June 2025, private sector credit rose by about N7.13 trillion yea-on-year but net domestic credit increased by approximately N1.87 trillion during the month.
The CBN’s relatively tight monetary policy stance notwithstanding, more banks still loaded funds to the private sector within the period. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 306th meeting on July 20 and 21.
The Committee reviewed recent developments in the global and domestic economies, assessed emerging risks to the outlook and considered their implications for monetary policy and retained all rates.
The Committee decided to retain the Monetary Policy Rate at 26.5 per cent; the Standing Facilities Corridor around the MPR at +50/-450 basis points and retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.
The MPC decision means that credit extension in the private sector will likely continue to rise because of rising confidence in the sector and calls by stakeholders for banks to invest in the private scetor instead of government securities.
