Big banks incur N442bn in AMCON expenses amid falling profit
Nigeria’s biggest banks are grappling with rising costs tied to the Asset Management Corporation of Nigeria (AMCON) levy, which surged to a combined N442 billion in the first half (H1) of 2025, even as profits weakened under mounting funding costs and slower loan growth.
Zenith Bank Plc, United Bank for Africa (UBA), and six other Nigerian banks saw a 34 percent rise in AMCON levy from N330 billion recorded in the same period of 2024, even as the sector contends with a sharp decline in revaluation gains which slashed earnings.
Data compiled from the banks’ financial statements by BusinessDay show that the AMCON expenses have continued to grow, reflecting both expanding balance sheets and rising off-balance sheet exposures. In 2024 alone, seven major banks paid a total of N436.5 billion to AMCON; the 2025 half-year figure already surpasses that pace.
Under the AMCON (Amendment) Act of 2015, banks are mandated to pay 0.5 percent of their total assets plus contingent liabilities as a banking sector resolution cost.
Among the tier-one institutions, Zenith Bank reported the highest levy at N143.8 billion, up from N92.2 billion in the same period last year, a 56 percent year-on-year jump. UBA followed with N92.8 billion, compared to N70.3 billion in 2024, while First HoldCo incurred N74.8 billion, slightly lower than the previous N77.2 billion.
Other contributors included: GTCO (N50.8 billion), Stanbic IBTC Holdings (N38 billion), FCMB Group (N23.3 billion), Wema Bank (N9.9 billion), and Sterling Financial Holding Company (N8.89 billion), respectively, during the period.
Read also: Existing Unity Bank shareholder acquired AMCON’s 34% stake
The heavy regulatory load comes at a time when core banking profitability is under strain. Zenith Bank, for example, reported a 7.9 percent decline in profit after tax in H1, sliding to N532.2 billion from N577.9 billion in the same period of 2024.
Its operating expenses surged, fuelled in part by a 56 percent year-on-year jump in its AMCON levy.
Other banks have also felt the pinch. While UBA posted a modest year-on-year increase in profit after tax, its profit before tax dropped by 3.3 percent, while its non-interest income weakened.
GTCO reported a 50 percent decline in its after-tax profit to N449 billion from N905 billion. First HoldCo also recorded a decline in its after-tax profit to N289.7 billion from N365.3 billion during the period under review.
The interest rate environment, rising impairment charges, and elevated regulatory costs have all been flagged by analysts as headwinds.
Industry watchers and shareholders are increasingly vocal about the sustainability of ongoing AMCON levies. They argue that the continual imposition of such charges essentially drains value from banks and their investors, with limited justification.
Some have called for AMCON to be wound down or restructured, given that it was intended as a temporary resolution mechanism.
Bisi Bakare, the national coordinator of Pragmatic Shareholders Association, said that AMCON should have wound down by now.
According to her, AMCON saw a free opportunity and loopholes and keyed into it (the hard-earned money of investors).
”AMCON has overstayed its usefulness. Hence, it should wind up. For the debts that have been taken over by them, what has been the level of recovery?
”Their continued stay is more like a conduit pipe that has consequences on the shareholders’ fund. AMCON should wind up and leave.
”The shareholders have been shouting in all fora that AMCON has overstayed; unfortunately, the government is not coming to our aid,” she said.
Moses Igbrude, national coordinator, Independent Shareholders Association of Nigeria, said that the AMCON levy on banks was another way of siphoning from the banking industry.
He said that it was high time the corporation wound up and the levy stopped.
”AMCON was set up with a clear purpose and timeline, but “the Nigerian thing” happened.
“Those who are benefiting from it both directly and indirectly launched a campaign for the extension of the timeline through the National Assembly. What AMCON management can not do for 10 years, give them eternity, they will not be able to do it because of vested interests.
”To collect AMCON levy from banks is another way of siphoning money from the banking industry, and because of this free money, AMCON will perpetuate itself forever,” he said.
