Nigeria’s biggest banks are grappling with a combined ₦442 billion in Asset Management Corporation of Nigeria (AMCON) expenses, a development that has significantly weighed on their profit margins amid a challenging economic climate.
According to financial statements from leading lenders including Access Holdings, Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), and First Bank Holdings the statutory AMCON charges have continued to erode earnings despite strong revenue growth driven by interest income and foreign exchange gains.
AMCON, established in 2010 to absorb non-performing loans and stabilize Nigeria’s banking sector, imposes an annual levy of 0.5% of banks’ total assets. This has translated into billions of naira in mandatory contributions each year, with the 2025 figure marking one of the highest collective charges in recent years.
Financial analysts note that while the levy was originally designed as a stabilizing mechanism, it has increasingly become a financial strain on the sector, especially as banks contend with rising operating costs, foreign exchange volatility, and tightening monetary policy.
“Banks are operating in a high-interest, high-inflation environment where margins are already under pressure,” said financial expert Dr. Chuka Ibe. “The AMCON levy, although important for systemic stability, is taking a bigger bite out of profits that could have been used for expansion or shareholder returns.”
Despite the heavy expense burden, most Tier-1 banks still posted moderate profit after tax figures, buoyed by increased earnings from digital banking, international operations, and treasury activities. However, year-on-year growth rates were notably slower compared to previous periods.
Industry observers are calling for a review of the AMCON levy structure, suggesting a phased reduction to ease pressure on the financial system as the agency approaches the end of its debt recovery mandate.
The development comes at a time when the Central Bank of Nigeria (CBN) is urging banks to strengthen capital buffers ahead of recapitalization plans, adding another layer of financial responsibility to the sector.
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