The Asset Management Corporation of Nigeria (AMCON) reported a N2.37 trillion loss on Friday, exposing the scale of financial devastation wrought by a 2009 banking crisis to be deeper than first thought.

The surprisingly large loss also raised questions about how AMCON will refinance a N1.7 trillion zero-coupon bond at the end of 2013, and may have implications for Nigeria’s national budget, according to Reuters.

The after-tax loss – which AMCON officials revealed at a news conference – comes in the first accounts to be published by the bad bank since it was set up in 2010 to absorb the debts of banks hamstrung in a crisis caused by over exposure to a weak oil and local stock market in 2008-09.

The crisis nearly sank nine lenders until the central bank intervened with a $4 billion bailout fund to keep them afloat.

The loss was a “wake-up call” that the banking sector’s problems will not be resolved as easily as first thought and that banks may end up paying a higher contribution towards its resolution, said Razia Khan, head of Africa research at Standard Chartered Bank.

“The non-performing loans that we bought were four times larger … which shows you that what was disclosed as NPLs (non-performing loans) on the books of the banks were (below) what we found when they started selling to us,” said AMCON Executive Director of Finance Mofoluke Dosumu.

“We bought four times what we initially envisaged.”

Analysts questioned how AMCON’s losses would impact its ability to repay a total of N4.5 trillion government-backed bonds used to clean up the banking sector if the value of the assets it hold continued to erode and whether the sinking fund will be sufficient in the short-term.

The banking sector has recovered sharply after the crisis with strong earnings drawing investors back to Nigerian shares following several years of turbulence in the local stock market that wiped 60 percent off their value in 2008.

The index of Nigeria’s top ten banks has gained 17.5 percent so far this year to recover from a loss of 32 percent in 2011. The main-share index is up 33 percent.

The loss figure, which was quoted as of December 2011, just reflected write downs of debts taken on at the time and equals half of Nigeria’s annual budget.

“The N4.5 trillion bonds equal about 11 percent of GDP … if AMCON can’t repay them, the government will have to. That would have a huge impact on the government’s balance sheet,” said Leon Myburgh sub-Saharan Africa strategist at Citi.

But others say the loss may be ring-fenced and AMCON may raise other revenues.

“It’s a one off loss. My understanding is that they don’t have to finance it,” said Standard Bank’s Samir Gadio.

“Effectively, they’ve just marked to market their losses at the time and we all know they acquired a lot of NPLs.”

AMCON said it had recovered N85 billion worth of bad loans and it expected to make more recoveries.

Chief executive Mustapha Chike-Obi, said he was confident the “bad bank” will be able to refinance its bonds at maturity next year and it could also choose to retire them using the proceeds of its sinking fund.

Chike-Obi said that Nigerian banks had agreed to increase their collective contributions to a post-crisis “sinking fund” used to refinance the bank’s bad debts to 100 billion naira, up from the 60 billion naira they had already put in.

It also expects to conclude the privatisation of three banks it nationalised after the crisis, by mid-2014, which would bring in some money, Chike-Obi said.