Kayode Tokede
Access Holdings Plc and five other publicly-listed Nigerian banks paid N453.71 billion as banking sector resolution costs and deposit insurance premiums to the Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC), respectively in the first half of 2024 that ended in June 2024, according to the audited/unaudited reports of the six banks collated by THISDAY.
The N453.71 billion represents about a 57.2 per cent increase from the N288.6 billion the six banks paid in the first half of 2023.
The other banks are Zenith Bank Plc, FBN Holdings Plc, Guaranty Trust Holding Company Plc (GTCO), Stanbic IBTC Holdings Plc, and FCMB Group Plc.
The banking sector resolution cost represents the AMCON's levy, which applies to the total balance sheet size of the bank.
The current applicable rate based on the AMCON Act of 2015 is 0.5 per cent of total assets plus total off-balance sheet assets.
AMCON was established in 2010 in a bid to stabilise the Nigerian banking system by efficiently resolving the non-performing loan assets of the banks in the economy.
Currently, it is being funded by a combination of loan recoveries, contributions from the Central Bank of Nigeria (CBN), sales of pledged assets, and a sinking fund assessed to the banks.
The federal government established AMCON with a 10-year mandate in response to the mounting bad loans and the requirement to prevent the banking sector's impending collapse.
The AMCON Act 2019 (Amended) gives the corporation broader authority to pursue obligors for unpaid debts.
Additionally, helping eligible financial institutions efficiently dispose of eligible bank assets in compliance with the Act's rules is one of the key objectives of the Act.
Initially, banks were required to pay 0.3 per cent of all assets into the sinking fund.
In 2013 it was raised to 0.5 per cent of total assets (and 0.3 per cent of contingent liabilities).
The six banks' total assets hit N114.16 trillion as of June 2024, representing a growth of 37per cent from N83.3 trillion in the 2023 financial year.
The breakdown of the reports compiled by THISDAY showed that Access Holdings paid the highest amount of N134.41 billion to AMCON and NDIC in H1 2024, about a 58 per cent increase from the N84.96 billion reported in H1 2023; followed by Zenith Bank, which paid N117.85 billion to AMCON and NDIC in H1 2024, about 66 per cent growth from N70.96 billion declared in H1 2023.
In the period under review, Access Holdings declared an AMCON levy of N112.2 billion in H1 2024, representing an increase of 63 per cent from the N68.81 billion reported in H1 2023, and N22.19 billion deposit insurance premium in H1 2024, about 37.3 per cent increase from the N16.16 billion reported in H1 2023.
Access Holdings' N112.2 billion AMCON levy was due to a significant increase in the asset value of the newly restructured bank, which grew on the back of multiple mergers and acquisitions.
As of June 2024, Access Holdings reported N36.6 trillion in total assets, up from the N26.69 trillion reported in 2023 to emerge as the largest financial institution by total assets in Nigeria.
For Zenith Bank, its AMCON levy stood at N92.2 billion in H1 2024, which was about a 61 per cent increase from the N57.38 billion in H1 2023.
Zenith Bank had closed June 2024 with N27.6 trillion in total assets, a growth of 35 per cent from N20.4 trillion reported in 2023FY.
FBN Holdings announced a total N97.99billion as AMCON and NDIC expenses in H1 2024, about 58 per cent increase from the N61.9 billion in H1 2023, just as GTCO declared N49.2 billion as AMCON and NDIC expenses in H1 2024, up from the N35.9 billion declared in H1 2023.
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According to GTCO, the AMCON levy increased by 33.6per cent to N36.6billion in H1 2024 from N27.4 billion in 2023 due to the growth in the underlying total Asset and contingents base at the bank level to N7.33trillion in 2023 from N5.46 trillion in 2022.
"Also, Deposit Insurance premium increased by 48.3per cent (N12.5billion in H1 2024 vs. N8.4billion in H1-2023) due to a 26.3 per cent increase in underlying customers' deposit volume to N5.26 trillion in 2023 from N3.55 trillion in 2022 (Deposit Insurance Premium is calculated on preceding year's customers' deposits)," the bank explained in a presentation to investors and analysts.
While Stanbic IBTC Holdings declared N33.8billion as AMCON and NDIC expenses in H1 2024, up from N20.37 billion in H1 2023, FCMB Group posted N20.45billion as AMCON and NDIC expenses in H1 2024, representing a growth of 40 per cent from the N14.58 billion declared in H1 2023.
