Nigeria’s Amcon Says Liabilities Reach $20 Billion on Takeovers

The Asset Management Corp. of Nigeria, which nationalized three banks and took on the bad debts of others to save the banking system, said liabilities surged last year to 3.2 trillion naira ($20 billion).

Net liabilities rose from 2.4 trillion naira a year earlier, Kayode Lambo, spokesman for the Lagos-based bad bank said in an e-mailed statement, without giving a reason for the increase. Amcon’s net loss for last year was 791.7 billion naira, compared with 2.4 trillion naira a year earlier.

Africa’s top oil producer established Amcon in 2010 as part of measures to save its banking industry from collapse as lenders reeled from bad loans to stock speculators and fuel importers after the global financial crisis in 2008. The Central Bank of Nigeria fired the chief executive officers of eight lenders and bailed them out with 620 billion naira.

Amcon sold bonds to fund the purchase of bad debts and took over three of the rescued banks after regulators said they were unlikely to meet a recapitalization deadline. Lenders are required to contribute part of their earnings to a fund aimed at paying for the bonds.

Amcon’s liabilities increased because of higher mark-to-market losses in the assets of the corporation, Pabina Yinkere, head of research at Lagos-based Vetiva Capital Management Ltd., said by phone today.

“Loan recoveries and interest earned on bonds issued in 2011 contributed to decline in net losses,” he said.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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