Monday, 10 October 2011 00:00 By Chinedum Uwaegbulam
CLOSE on the heels of recent revocation of licences of failed banks and acquisition of toxic assets in 10 banks, the Asset Management Corporation of Nigeria (AMCON) has selected 50 estate surveying firms to undertake independent valuation of the Non-Performing Loans (NPLs) of the rescued banks.
AMCON’s mission is to acquire non-performing loans across the banking industry, recapitalise the rescued banks and manage the acquired assets. To date, all the margin loans in the banking sector and non-performing loans of the rescued banks, both total in excess of N2.2 trillion while purchase value is about N770 billion.
The corporation had accepted NPLs backed by other perfected collateral from banks through current estimate of the loan value supplied by the institution, which is based on current market analysis of the collateral and a written guarantee of good faith by the institution.
With the proposed valuation, the corporation has opened a new frontier for the estate surveying profession known as experts at valuing properties.
Under the proposed valuation exercise to be carried out by members of the Nigerian Institute of Estate Surveyors and Valuers (NIESV), which is the first phase of the scheme, the mandate entails the valuation of the banks collaterals in the acquired NPLs in the seven of the 10 acquired banks.
The Guardian learnt that AMCON is expected to throw up more jobs for the estate surveyors and valuers soon in the areas of facility managers for properties under forfeiture/forced sales, as well as, creates Real Estate Investment Trusts (REITs). The corporation is statutorily empowered to maintain and manage a portfolio of diverse assets including equities, fixed income bonds and real estate.
Senior AMCON officials say the corporation’s initiative of seeking for third party asset management role, which is one of its core businesses, will go a long way to bring wealth to the company.
Specifically, four estate surveying and valuation firms, namely, Kano-based Messrs Mohammad and Company, Bode Adediji Partnership, Paul Osaji and Company and Oyom Associates has been appointed to coordinate and supervise the valuation exercises to be conducted by 50 estate firms in all the geopolitical zones.
The Guardian also gathered that the first phase would comprise valuation of collaterals in the rescued banks - MainStreet Bank Limited (Afribank Nigeria Plc), Keystone Bank Limited (BankPHB), and Enterprise Bank Limited (Spring Bank Plc) as well as Equitorial Trust Bank, Oceanic bank, Union Bank Plc and FinBank.
The AMCON initiative was welcomed as a way of resolving the problem of huge non-performing loans which crippled the industry, with the apex bank intervening in eight banks, but there were concerns on the valuation method that would be used to value the toxic assets of the banks.
On NPLs backed by other perfected collateral, AMCON agreed to accept the most current estimate of the loan value supplied by the institution while a post-transaction adjustment agreement was made that allows AMCON to independently value the loan
Sources disclosed that the exercise would cut across all aspects of valuation such as buildings, ships, equipment, plants and machinery across the country. Inspection of the collaterals is expected to have commenced last week while the appointed firms are expected to turn in an initial report in few months time. The entire valuation exercise may take up to one year.
A Senior officials of AMCON who confirmed the development, hinted that the “valuation is not about the banks, but the collateral behind the acquired NPLs.” Efforts to get NIESV President, Mr. Bode Adediji to comment on the valuation exercise proved abortive.