Nigeria's Amcon Expects to Return to Profit as Losses Narrow
Nigeria's Amcon Narrows Loss by 90% in 2017 as Economy Improves
(Bloomberg) -- The Asset Management Corp. of Nigeria, which was set up by the West African nation to buy bad debts from banks, said it could return to profit this year after losses in 2017 narrowed as the economy rebounded from its worst contraction in more than two decades.
The loss for the year through December improved to 16.4 billion naira ($45.3 million) from 164.9 billion naira in 2016, according to Executive Director Aminu Ismail. “If the economy continues with a positive outlook,” Amcon expects to return to profit this year, he said.
Amcon’s performance is in stark contrast to 2016, when chief executive officer Ahmed Kuru said the weak economy was hindering efforts to recover loans and other assets it took on in 2011. The Abuja-based institution acquired 12,537 non-performing loans worth 1.7 trillion naira from 22 financial institutions, following the 2009 banking crisis, according to its website.
Gross earnings increased by 23 percent to 341.8 billion naira, Ismail told reporters in Lagos Thursday. A 21 percent increase in interest income to 42.6 billion naira as well as the 41 billion-naira sale of Keystone Bank helped boost performance even as operating expenses rose by 16 percent, Ismail said.
Amcon’s costs were “driven” by an increase in the price of aviation fuel and overhead expenses for two airlines it has taken over, Arik Air and Aero Contractors, according to an emailed presentation of the 2017 results. It plans to sell Aero Contractors this year and has appointed advisers for the divestment of Arik, the presentation showed.
The economy of Africa’s biggest oil producer expanded 1.95 percent in the three months through March from a year earlier, after contracting in 2016. It is forecast to grow 2.1 percent this year by the International Monetary Fund.
To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net
To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net, Vernon Wessels, Sophie Mongalvy
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