Asset Management Corporation

What are the advantages of an AMC approach?

1.  Centralisation of bad loans in one or a few hands and therefore obviously more clout
2.  It is possible to give special legislative powers to a few AMC rather than to each bank
3.  Banks are left with cleaner balance sheets and do not have to deal with problem clients. Regular banking relations with the group are not affected.
4.  Because it deals with a larger portfolio, it can mix up good assets with bad ones and make a sale which is palatable to buyers.
5.  It is easier to do a capital-market based funding for an AMC than for the banks themselves.

It has been documented that centralized AMC which acted as rapid disposition vehicles of toxic assets appear to have had generally greater success than AMC that were set up to execute corporate restructuring mandates.

The Asset Management Company (AMC) of Nigeria is a Special Purpose Vehicle (SPV) that will be use for distributing losses accrued most by the financial sector. The need for this Special Purpose Vehicle (SPV) need to be put in place to reposition the Nigerian financial system to attract the dividends of the global economic recovery in compensation of global financial collapse