Yesterday, I quoted a Bloomberg article which reported that Sierra Leone Mining company London Mining looks likely to go into liquidation as it has run out of cash. The company has faced the now serial twin dose of a slump in commodity prices as well as the fear of investors lending them anymore money due to Ebola. They also mentioned First Rand, Ecobank and First Bank (UK) as one of those banks that look set to take a $200million hit in loans if they do go bust.
Unconfirmed report now suggest First Bank’s portion of that loan may be about $45million (N7.5b) and if the company goes bust may have to be written down by First Bank. FBNH the parent company wrote off N6.6billion in loans impaired in its half year results making this a more dire write off considering its one off nature. FBNH by the way wrote off N20billion in loans in 2013 alone and it is uncertain how much more loans it has that may go bad.
As a shareholder of FBNH this gives me the chills and it will be helpful if the bank comes out to clarify the story.