“We will be posting a loss for the full year 2011, arising mainly from some investment and underwriting of several share issues dating back to 2009 and some non-performing loans sold to AMCON (Assets Management Company of Nigeria),” chief executive Ladi Balogun told reporters.
FCMB, which recently completed a buy-out of rescued lender Finbank, said the losses were due to a 29 billion naira write-off for bad loans sold to state-owned “bad bank” AMCON and the underwriting of preference shares issued by Finbank. AMCON was set up in response to the global banking crisis to absorb non-performing loans from the sector.
Rival lender Zenith Bank, the first to announce 2011 results, reported a higher-than-expected risk charge for bad loans for its fourth quarter on Friday, though it posted a pre-tax profit increase of 21 percent. Zenith’s risk charge raised fears among investors there could be more bank write-downs in the offing.