The Central Bank of Nigeria (CBN) Thursday reappointed Sola Adeduntan, the ousted Managing Director/CEO of First Bank of Nigeria Limited to his position as CEO.
The apex bank also appointed a new Board and Management for First Bank of Nigeria Limited and FBN Holdings Plc.
The total management and board reshuffle saw Gbenga Shobo, restored to his former position as Deputy Managing Director/CEO for the bank.
The CBN Governor, Godwin Emefiele, said the Management of the CBN acted in line with its powers under Bank and Other Financial Institutions Act (BOFIA) 2020.
The CBN boss therefore announced immediate removal of the all directors of First Bank of Nigeria Limited and FBN Holdings Plc and subsequently appointed new replacements.
Remi Babalola was appointed the new Chairman, FBN Holdings. He replaced Oba Otudeko, the former Chairman.
The new directors are Dr. Fatade Abiodun Oluwole, Kofo Dosekun, Remi Lasaki, Dr Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam, Sir Peter Aliogo and UK Eke – Managing Director.
The CBN also named Tunde Hassan-Odukale as Chairman, First Bank of Nigeria Limited. He replaced Mrs. Ibukun Awosika. The new directors of the bank are Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo. Remi Oni was appointed Executive Director and Abdullahi Ibrahim also appointed as Executive Director.
The apex bank has also reassured the depositors, creditors and other stakeholders of the bank of its commitment to ensure the stability of the financial system.
“There is therefore no cause for panic amongst the banking public, given that the actions being taken are meant to strengthen the bank and position it as a banking industry giant,” the apex bank said.
According to Emefiele, the board is vested with the authority to make changes in the management team subject to CBN approval.
However, the CBN considers itself a key stakeholder in management changes involving FBN due to the forbearances and close monitoring by the bank over the last five years aimed at stemming the slide in the going concern status of the bank.
“It was therefore surprising for the CBN to learn through media reports that the board of directors of FBN, a systemically important bank under regulatory forbearance regime had effected sweeping changes in executive management without engagement and/or prior notice to the regulatory authorities,” Emefiele said.
He said the action by the board of FBN sends a negative signal to the market on the stability of leadership on the board and management and it is in light of the foregoing that the CBN queried the board of directors on the unfortunate developments at the bank.
FBN is one of the systemically important banks in the Nigerian banking sector given its historical significance, balance sheet size, large customer base and high level of interconnectedness with other financial service providers, amongst others.
He said FBN has over 31 million customers, with deposit base of N4.2 trillion, shareholders funds of N618 billion and NIBSS instant payment (NIP) processing capacity of 22 per cent of the industry.
Emefiele said it is imperative 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.
He said First Bank maintained healthy operations up until 2016 financial year when the CBN’s target examination revealed that the bank was in grave financial condition with its capital adequacy ratio (CAR) and non-performing loans ratio (NPL) substantially breaching acceptable prudential standards.
He attributed the problems at the bank to bad credit decisions, significant and non-performing insider loans and poor corporate governance practices. The shareholders of the bank and FBN Holding Plc also lacked the capacity to recapitalize the bank to minimum requirements. This conclusions arose from various entreaties by the CBN to them to recapitalize.
Emefiele said the CBN stepped in to stabilize the bank in its quest to maintain financial stability, especially given FBN’s systemic importance as enumerated earlier.
The shares of FBN Holdings (FBNH) Plc dropped 6.76 per cent to N6.90 per share. The FBNH began the year with a share price of N7.15 but has since lost 3.5 per cent off that price valuation, ranking it 109th on the Nigeria Stock Exchange in terms of year-to-date performance.
FBN Holdings Plc is the non-operating holding company of First Bank of Nigeria Limited, a commercial bank with operations in 10 countries.
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