CIAN canvasses asset auction to reduce debt

The Certified Institute of Auctioneers Nigeria (CIAN), has urged financial institutions to adopt the auctioning of liquidated collaterals to reduce the burden of bad debts.The Chairman of the institute, Adewumi Onanuga, who gave the charge, said financial institutions allow their assets to depreciate significantly, while they obtain loans and incur debts.He said financial institutions continue to contribute to Asset Management Corporation of Nigeria (AMCON’s) debt portfolio, which is currently over N5trillion, while they carry the properties pledged in their book for several years, which do not command higher price to catch up with the interest charges on the loans.

He also added that a lot of assets, from as minimal as office furniture, household appliances, office equipment to vehicles are left to rot away in government yards and offices, even as uncompleted and abandoned projects fall into this groups.

“What value would a negotiated settlement/discount on the interest on the loan be and what immediate advantage or prospect is offered by turning the asset over to cash promptly rather than carrying the figure that would never be realised in their books,” he said.

Delivering the keynote address titled: “Liquidating Collateral Assets in Nigeria Financial Institutions: Auction as a Way Out”, the Head, Global Banking/Executive Director, Corporate and Institutional Banking, Standard Chartered Bank, Leke Ogunlewe, said the total amount of Non-Performing Loans in Nigerian banks stood at N2.36 trillion as at 2017, citing Nigeria Deposit Insurance Corporation (NDIC)/ Central Bank of Nigeria (CBN) reports.He noted that auctioneers would need to develop and project the respect and professionalism required to play the vital role of transparent arbiters to achieve the key need of collateral asset realisation process.

Meanwhile, the institute has appointed new executive committee that included Adewumi Onanuga as its Chairman; Joseph Balogun as Vice Chairman, Biodun Adeniran as General Secretary, Tina Aigbedion as Treasurer, Oyebola Demurin as Financial Secretary and Gbenga Adebayo-Sode as Welfare Secretary.

Commending the newly appointed executives, the Lagos State Commissioner for Commerce, Industry and Cooperatives, Olayinka Oladunjoye, who was represented by an assistant director in the ministry Alayande Olarenwaju charged the executives to steer the affairs of the institute forward, while it serve the general public in auction areas of all assets.