Zenith Bank, 9 others declare N283.85bn as AMCON levy in Q1 2025
Zenith Bank Plc and nine other banks reported N283.85 billion Asset Management Corporation of Nigeria (AMCON) levy in first quarter (Q1) of 2025, representing an increase of 28.3per cent from N221.18 billion declared in first quarter of 2024.
This is according to data extracted from the unaudited Q1 ended March 2025 financial statements of the banks published on the Nigerian Exchange Limited (NGX).
The 10 banks are: First Holdco Plc, Zenith Bank Plc, Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa Plc (UBA), and Access Holdings Plc.
Others are: Fidelity Bank Plc, Wema Bank Plc, Stanbic IBTC Holdings Plc, Sterling Financial Holdings Company Plc and FCMB Group Plc.
The 10 banks, thus, declared a whopping sum of N1.58 trillion as profit before tax, representing an increase of 0.36 per cent from N1.58 trillion in 2023.
Banking sector resolution cost represents the Corporation levy, which is applicable on the total balance sheet size of the Bank. The current applicable rate based on AMCON Act of 2015 is 0.5per cent of total assets plus total off balance sheet assets.
Owing to the importance of the financial services sector, involving public funds, there is a need for buffers to protect public funds in case of bank failure or liquidation, hence, the need for deposit insurance.
Zenith Bank paid the highest AMCON levy in Q1 2025, followed by First Holdco Plc.
Zenith Bank, with a total assets of N32.4 trillion as of March 2025, paid AMCON levy of N71.92 billion, in Q1 2025, up by 56 per cent from N46.22 billion reported in Q1 2024.
AMCON was established in 2010 in a bid to stabilize 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 0.3per cent of all assets into the sinking fund. In 2013 it was raised to 0.5per cent of total assets (and 0.3per cent of contingent liabilities).
Stakeholders have expressed mixed feelings over 0.5 per cent AMCON levy on banks.
The Investment Banker & Stockbroker, Mr. Tajudeen Olayinka said the operations of AMCON is long overdue.
“The fact that AMCON continues to place yearly levies on banks in the country in an endless manner, is an indication that AMCON is unable to pay its debts, and that its birth as a failure resolution option was unnecessary or absolutely misplaced at the time it was conceived.
“Those failed banks could have been better managed with more robust failure resolution options outside AMCON arrangement. And I blame the governor of CBN at that time, Sanusi Lamido Sanusi, for the error,” Olayinka explained.
