Honeywell denies breaching credit requirements in First Bank

By Cynthia Alo

Contrary to the popular narratives, the management of Honeywell Group, a major corporate stakeholder in First Bank of Nigeria Limited, has said its loan facilities from the bank are within regulatory prescriptions and are performing according to bankis’ credit standards.

This is coming at the backdrop of allegations from both the Central Bank of Nigeria, CBN, and sources at First Bank that the company’s loans breached regulatory requirements.

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The apex bank had, consequently reconstituted the boards of directors of both the bank and its parent company, First Banking Holdings Plc, removing some members believed to have links or allegiance to owners of Honeywell.

But in a statement yesterday the company said: “We have serviced all our credit facilities in line with the terms agreed with First Bank and at no point have any of these facilities been non-performing.

“In accordance with agreed terms, our facilities are adequately secured with First Bank, with collaterals in place at over 170% of Forced Sales Value and 230% at Open Market Value.

“In addition to the above, First Bank, on the directive of CBN, requested additional security in the form of FBN Holdings Plc shares held by the Chairman of Honeywell Group, Dr. Oba Otudeko, citing a 2001 circular. This was duly provided through an authorisation to place a lien on the shares.”

On the subsequent performance of the loans the company stated: “Honeywell Group has continued to meet all its obligations on its facilities with the Bank according to agreed terms and has reduced its exposure by nearly 30% in 2.5 years. The facilities were charged at market rates and the Bank continues to earn significant interest therefrom.”

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