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Nigeria’s biggest commercial banks have spent a total of ₦442 billion on the Asset Management Corporation of Nigeria (AMCON) levy in the first half of 2025, representing a 34 percent increase compared to ₦330 billion paid in the same period last year. The rising levy has become one of the key reasons many banks are reporting weaker profits despite higher income from other operations.
The affected banks include Zenith Bank Plc, United Bank for Africa (UBA), Access Holdings Plc, Guaranty Trust Holding Company (GTCO), Fidelity Bank Plc, First Bank of Nigeria Holdings, Union Bank, and Stanbic IBTC Bank. The eight major lenders collectively dominate Nigeria’s banking industry, controlling more than 70 percent of total assets in the sector.
According to financial analysts quoted by BusinessDay, the increase in AMCON expenses has put significant pressure on the profitability of these banks at a time when they are already facing other headwinds such as high funding costs, inflationary pressures, and reduced loan demand.
The AMCON levy is a statutory charge that all commercial banks in Nigeria must pay to help the government recover toxic assets acquired during the 2009 banking crisis. The corporation was created to buy bad loans and stabilise the financial system, but the annual levy has become a heavy burden on banks, especially during tough economic conditions.
A senior banking executive who spoke on condition of anonymity said that most banks are now struggling to maintain strong profit margins. “In previous years, revaluation gains from foreign exchange movements and property helped boost our income. But in 2025, those gains have reduced sharply, leaving us exposed to higher expenses,” the executive said.
Banking experts have also warned that if the trend continues, some lenders might find it difficult to maintain capital adequacy ratios as required by the Central Bank of Nigeria (CBN). This could force them to raise new capital or consider mergers and acquisitions to stay compliant.
To manage costs, some banks are already cutting down on expansion plans, reviewing staff expenses, and adjusting interest rates on loans. However, these measures could affect lending to households and small businesses, slowing economic recovery efforts.
Economists have linked the banks’ profit decline to broader macroeconomic challenges. Nigeria’s inflation remains above 30 percent, the naira continues to face pressure in the foreign exchange market, and high interest rates have made borrowing more expensive. These issues have also reduced investment appetite and raised non-performing loan risks in the banking sector.
The Central Bank and the Nigeria Deposit Insurance Corporation (NDIC) are reportedly keeping close watch on the situation. Both regulators have assured that the country’s financial system remains strong and that banks are well-capitalised to absorb short-term shocks.
Meanwhile, several industry stakeholders are calling for a review of the AMCON levy structure. They argue that during periods of economic slowdown, the government should consider reducing or restructuring the levy to give banks room to operate efficiently.
An economist, Dr. Ayo Teriba, said, “The AMCON levy made sense when the economy was stable and growing, but with the current inflation and low profitability across the banking sector, there’s a strong case for a flexible approach that links the levy rate to actual earnings.”
Some financial experts believe that the continued rise in statutory charges could discourage investment in the banking sector and increase the cost of credit for ordinary Nigerians. “If the government wants banks to keep supporting small businesses and critical sectors, it must avoid overtaxing them through regulatory levies,” one analyst said.
Despite the challenges, Nigerian banks remain resilient. Most of the major lenders have diversified their operations into digital banking, trade finance, asset management, and insurance subsidiaries to offset weaker interest income. These new income streams are expected to provide some relief in the second half of 2025.
However, the ₦442 billion AMCON charge remains a warning signal about the growing strain on banks’ balance sheets. As global and domestic conditions remain uncertain, investors and regulators will be watching closely to see how banks manage their capital, maintain liquidity, and protect shareholder value.