Mofoluke Dosunmu, Executive Director, Finance and Operations, Assets Management Corporation of Nigeria (AMCON) has disclosed that the bridged banks have earned the confidence of the investing public.

The bridged banks, Keystone Bank Ltd., Enterprise Bank Ltd and Mainstreet Bank Ltd., are the defunct BankPHB, Spring Bank and Afribank, respectively.

“In the first place, we have confidence back in the industry. Before now, we had a kind of segregation in the market — some banks were healthy, some were not healthy. Now, you don?t have that anymore,” Dosunmu said.

“Because what we saw was that initially when the bridged banks started, they did lose some depositors’ funds. But when the customers saw that anytime they walked into those institutions, they can get their money back, they started banking with them.?

According to her, the bridged banks had also reduced their reliance on term deposits, as current account balances constitute the bulk of their deposits, unlike a year ago when term deposits with high interest rates were their major deposits.

Dosunmu said that the new confidence level in the banks had also resulted in the reduced cases of fraud and improved earnings from other income sources like fees and commissions.

She said the happiness of the corporation stemmed from the fact that Nigerians do not just deposit money in the rescued banks? current accounts, but also do business with the banks, as noticed from their commission on transactions.

The AMCON director said that the banks had not only recovered, but were on the path of growth.

“A lot of waste has been stopped. Leakages have been closed. There have been some adjustments in their staffing, whereas people that were not really contributing to the bottom line of the banks have been successfully exited,” she said.

“Even the operational costs of running those institutions have come down. Now, you have, in addition, more focused management teams. They have specific terms of reference. They are measured particularly against the background that what went into these banks is coming from a sinking fund that is contributed by other banks.”

The Sinking Fund is a binding agreement between the banks to contribute 30 basis points of their audited total assets at the end of each year, to help AMCON to offset some of its expenses.

It became exigent, following the realisation by CBN and the banks that the eligible banks? assets to be acquired by AMCON may not be sufficient to meet the costs of restoring financial stability to such financial institutions.

On whether the banks had returned to profitability, she said that the lenders had broken even, returned to profitability and drastically reduced the rate of their losses.

“What I would say is that they are taking necessary measures, corrective steps to ensure that the banks are run better. You find that the rate of loss has definitely changed drastically, for those that haven?t broken even. But some of them have broken even,” she said.

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