Lagos — The Asset Management Corporation of Nigeria (AMCON) said yesterday that confidence has been restored in the bridge banks and they are now competing like any other lender in the country.

According to the corporation's Executive Director, Finance and Operations, Mrs. Mofoluke Dosunmu, the segregation (healthy and unhealthy) among the banks has fizzled away.

The bridge banks - Keystone, Enterprise and Mainstreet - are the defunct BankPHB, Spring Bank and Afribank. They were among the banks rescued by the Central Bank of Nigeria (CBN). Their shareholders had refused to allow new investors recapitalise them, culminating in their liquidation and injection of funds by the AMCON.

"In the first place, we have confidence back in the industry. Before you had a kind of segregation in the market, some banks were healthy, some were not healthy. Now you don't have that anymore. Because what we saw was that initially when the banks (bridged banks) started, they did lose some depositors funds. But when the customers saw that anytime they walk into those institutions they can get their money back, they started banking with them," she said.

She said that the bridged banks have been able to reduce their costs of funds because current account balances now constitute a higher proportion of their deposits unlike a year ago when term deposits, which were at high interest rates formed the bulk of their deposits.

"They (bridged banks) have decreased their reliance on term deposits. If you look in terms of percentages from what you had before where you had current account deposits being only about 30 per cent, now it's almost 50 per cent. So that has reflected in the confidence back in the banks. It has reduced the case of frauds and it also reflects in their other income like fees and commissions because people don't just put money in current account, they actually do business with the institution, which result in things like COT, fees, commission," she explained.

Moreover, she noted that there have also been some drastic cost cutting steps taken by the institutions. "A lot of waste has been stopped. Leakages have been stemmed. I'm sure you are aware that over the years, there have been some adjustments in their staffing whereas people that were not really contributing to the bottom line of bank have been successfully exited. So you find out that even the operational cost of running those institutions have come down.