Shareholders Alarmed Over Rising AMCON Levies on Access, GTCO, Other Banks

Shareholders of Nigeria’s leading banks are increasingly expressing concern as their contributions to the Asset Management Corporation of Nigeria (AMCON) have surged to N393.03 billion by the end of the 2024 financial year. This sharp rise has raised questions about its potential impact on bank profitability and shareholder returns, even though some banks announced dividend payouts.

Financial statements for the period ending December 31, 2024, show that Access Holdings Plc, FBN Holdings Plc, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), and Zenith Bank together contributed N393.03 billion, a sharp increase from N244.98 billion recorded in the same period in 2023. This represents a 292.7% rise, largely attributed to a revised AMCON levy formula that now factors in banks’ total assets and off-balance-sheet exposures.

For instance, Access Holdings’ levy rose from N68.81 billion to N112.23 billion. FBN Holdings paid N80.03 billion, up from N51.12 billion, while GTCO’s contribution grew to N36.66 billion from N27.31 billion. UBA’s levy jumped to N71.91 billion from N40.36 billion, and Zenith Bank’s contribution increased from N57.38 billion to N92.20 billion. Despite recording large profits from interest income in 2024, many banks have criticized the fairness of the AMCON levies.

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This development has stirred frustration among investors. Many warn that if these steep levies continue, bank profits could decline sharply, affecting dividend payouts to shareholders. Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria (PSAN), criticized the levies, arguing that AMCON had outlived its original purpose of stabilizing the banking sector after the 2008 financial crisis.

Okezie called for an end to bank funding for AMCON, arguing that it is harming shareholder returns and discouraging investments in bank stocks. He stated that the drastic increase in levies is punitive, especially at a time when Nigerian banks have shown strong fundamentals and performance improvements. He further asserted that if the federal government wishes to sustain AMCON, it should finance it directly rather than burdening the banks. Okezie also noted that despite collecting substantial funds from banks, AMCON has continued to report losses and has struggled to sell assets recovered from debtors.

AMCON, created in 2010 to handle non-performing loans and stabilize the banking sector, remains heavily reliant on contributions from banks. However, the recent spike in levies has reignited debate about the fairness and sustainability of this funding model.

The Central Bank of Nigeria (CBN), under Governor Olayemi Cardoso, has yet to publicly address the controversy surrounding the increased AMCON levies. Meanwhile, at the 2023 Bank Directors’ Summit in Abuja, Mustafa Chike-Obi, Chairman of the Bank Directors Association of Nigeria (BDAN), urged the federal government to halt the AMCON levy due to the financial pressure it places on the industry.

In related developments, seven major Nigerian banks reported a combined profit of N4.2 trillion for the 2024 financial year, despite the challenging economic environment. These banks — Zenith Bank PLC, United Bank for Africa (UBA), Guaranty Trust Holding Company Plc (GTCO), First Bank, Fidelity Bank, Stanbic IBTC, and Wema Bank — achieved impressive profit growth, highlighting their resilience amid tough conditions.