The Governor of Central Bank of Nigeria (CBN) in swift response to the sudden removal of the Managing Director of First Bank Nigeria Limited, Dr Adesola Adedutan, announced the removal of the boards of both First Bank of Nigeria (FBN) and FBN Holdings Plc. CBN also reinstated Dr Adesola Adedutan as the Bank’s CEO.
The New Board members announced by the CBN for FBN Holdings Plc are:
- Remi Babalola – Chairman
- Dr Fatade Abiodun Oluwole
- Kofo Dosekun
- Remi Lasaki
- Dr Alimi Abdulrasaq
- Alhaji Ahmed Modibbo
- Alhaji Khalifa Imam
- Sir. Peter Aliogo
- UK Eke – Managing Director.
New board members for First Bank of Nigeria Limited include:
- Tunde Hassan-Odukale – Chairman
- Tokunbo Martins
- Uche Nwokedi
- Adekunle Sonola
- Isioma Ogodazi
- Ebenezer Olufowose
- Ishaya Elijah B. Dodo
- Dr Sola Adeduntan – MD/CEO
- Gbenga Shobo – Deputy Managing Director
- Remi Oni – Executive Director
- Abdullahi Ibrahim – Executive Director.
The trending news has generated a lot of concerns from the investing public as regards the fate of First Bank going forward. Concerns have been raised about the new Board structure and how the share price of the Bank will be affected. Others also raised concerns that the management may face challenge from the loyalists of ousted Directors.
The CBN Governor, Godwin Emefiele pointed out that First Bank of Nigeria is one of Nigeria’s systematically important banks given its historical significance, balance sheet size and, large customer base and high level of interconnectedness with other financial providers. First Bank of Nigeria has over 31 million customers, with deposit base of N4.2tn, shareholders funds of N618bn and NIBSS instant payment processing capacity of 22 per cent of the industry.
According to CBN, its move to intervene in the matter is in order to protect the minority shareholders that have no voice to air their views, also important, is the protection of the over 31 million customers of the bank who see FBN as a safe haven for their hard-earned savings.
Problems attributed to FBNH include bad credit decisions, significant and non-performing insider loans and poor corporate governance practices.
Emefiele noted that indeed, the CBN had been satisfied working with Adeduntan on a stabilisation regime for First Bank since 2016.
He said Adeduntan had played his role to the best of CBN’s knowledge and the best that could be done of a professional banker.
Emefiele stated that Adeduntan had insisted on best governance being put in place, adding that the apex bank had the suspicion that Adeduntan was removed because he took decisions that did not favour major shareholders.
The action by the board of FBN sent a negative signal to the market on the stability of leadership on the board and management and it is in the light of the foregoing that the CBN queried the board of directors of the Bank.
Our position on the new Board of First Bank
When you look at the construction of the new Board for FBNH and First Bank Nigeria Limited, they are not strangers to the bank. For instance, Mr Remi Babalola, the new Chairman of the Holding Company was at a time an executive director of the Bank. Mr Oye Hazzan Odukale who has been appointed has the Chairman of the Bank, has been a director in the bank for not less than 10 years. If you look at some other members of the Board for the two institutions, that is the Bank and the Group, they are people that have been either on the Board or Management of First Bank at one time or the other in the past.
To a large extent, there is not going to be any negative figures for bank as a result of the sack of their Board. The Central Bank did not alter the management of the two institutions, the Deputy Managing Director of First Bank Nigeria Limited, Gbenga Shobo, who was earlier announced as the Managing Director of the Bank, still remains as the Deputy Managing Director. The two other guys remains as Executive Directors; they were not touched. U.K Eke also remains as the Managing Director of the Holding Company.
It is the Management that operates in an institution. So people that will because of the current issue decide to sell the shares of FBNH will later see that they are making a mistake.
The Central Bank via their twitter handle has given order that some of the loans been held by some members of the terminated Board should be recovered within 48 hours. So, this is a win- win situation for the bank.
Technically speaking, this is an opportunity for people to go and buy more shares of FBNH. It should be an opportunity to gather money to buy more of First Bank shares.
For those who really understand how investment works, this kind of information will make people multimillionaires in the shares of First Bank.