Top Nigerian Banks Record ₦442bn AMCON Charges as Profits Decline
STORY WRITTEN BY PETERSON OCTOBER 14,2025
Nigeria’s biggest banks are facing renewed financial pressure as their Asset Management Corporation of Nigeria (AMCON) expenses surged to ₦442 billion, even as profit margins continue to weaken amid volatile market conditions.
The AMCON levy, a mandatory contribution imposed on commercial banks to help the corporation recover toxic assets acquired after the 2008 financial crisis, has significantly weighed on the earnings of Tier-1 lenders, including Access Holdings, Zenith Bank, GTCO, UBA, and First Bank Holdings.
According to industry data, the five leading financial institutions collectively spent over ₦442 billion in 2025 servicing AMCON obligations — a sharp rise compared to previous years — reducing their profitability despite higher gross earnings driven by interest rate adjustments and FX revaluation gains.
Financial analysts attribute the drop in profitability to mounting operational costs, increased impairment charges, and the sustained AMCON contribution, which remains one of the most burdensome regulatory costs in the banking sector.
“The AMCON charge continues to erode the bottom line of many banks,” said a Lagos-based financial analyst. “Even though revenues are improving, net profits are shrinking due to these statutory deductions.”
The AMCON levy, currently pegged at 0.5% of total assets, is deducted annually from banks’ earnings to support the resolution of non-performing loans in the financial system. However, with banks facing new Basel III capital requirements, FX volatility, and loan restructuring risks, many are calling for a review of the policy.
Some bank executives have also urged regulators to reconsider the AMCON model, arguing that it has outlived its initial purpose and now constrains financial institutions’ capacity to reinvest in innovation and credit expansion.
Despite these challenges, Nigerian banks continue to show resilience through cost-optimization strategies, digital banking expansion, and diversified income streams, which are helping cushion the impact of regulatory expenses.
“Banks will need to balance compliance obligations with long-term growth plans,” the analyst added. “A more flexible AMCON framework could ease pressure and stimulate greater credit growth in the real economy.”
With profitability under strain and macroeconomic uncertainty persisting, stakeholders are now urging both the Central Bank of Nigeria (CBN) and AMCON to adopt a phased or performance-based contribution model that would reduce the burden on banks and foster a healthier financial ecosystem.
