Home Economy What Central Bank did to First Bank, experts excited as new directors emerge
Economy - News - Thematterspress - April 29, 2021

What Central Bank did to First Bank, experts excited as new directors emerge

First Bank

The Central Bank of Nigeria (CBN) has announced the immediate removal of all directors of First Bank of Nigeria Ltd. and FBN Holdings Plc over purported management changes at the bank.

The CBN Governor, Mr Godwin Emeifele said this in a statement titled “The Purported Management Change at the First Bank of Nigeria Ltd.

Consequently, Emeifele announced the appointment of Mr Remi Babalola as the Chairman of FBN Holdings.

Other directors appointed by the apex bank are Dr Fatade Abiodun Oluwole, Kofo Dosekun Remi Lasaki, Dr Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam and Sir Peter Aliogo.

Emefiele, however, retained Mr UK Eke as the holding company’s Managing Director.

On the other hand, Mr Tunde Hassan-Odukale was appointed as the Chairman of FirstBank.
The CBN returned Dr Sola Adeduntan as the bank’s Managing Director, Mr Gbenga Shobo as the Deputy Managing Director.

Mr Remi Oni and Abdullahi Ibrahim were announced as Executive Directors.
Other directors are Tokunbo Martins, Uche Nwokedi , Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose and Ishaya Elijah B. Dodo.

He said the management of the CBN, in line with its powers under BOFIA 2020 approved and took the action following a review of the situation and in order to preserve stability of the bank to protect minority shareholders and depositors.

“As you may be aware, 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.

“By our last assessment, 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.

“To us at the CBN, not only is it 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.

Recall that the CBN had earlier queried the Board of the First Bank of Nigeria Plc for removing Dr Adesola Adeduntan, the Managing Director/Chief Executive Officer, without regulatory approval.

The query was contained in a letter dated April 28, 2021 signed by the CBN Director, Banking Supervision, Mr Haruna Mustafa.

Mustafa had said that the action was taken without due consultations with the regulatory authorities, especially given the systemic importance of the commercial bank.

He noted that the tenure of Adeduntan has yet to expire.
“The CBN was not made aware of any report from the board indicting the managing director of any wrongdoing or misconduct; there appears to be no apparent justification for the precipitate removal.

“We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank, which has enhanced its asset quality, capital adequacy and liquidity ratios amongst other prudential indicators.

“It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiration of his second tenure which is due on Dec. 31, 2021,” he added.

Mustafa noted that the removal of a sitting MD/CEO of a systemically important bank was not good.

“The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for five to six years without prior consultation and justifiable basis has dire implications for the bank and also portends significant risks to the stability of the financial system.

“In light of the foregoing, you are required to explain why disciplinary action should not be taken against the board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.

“In the meantime, you are directed to desist forthwith from making any further public/media comments on the matter.

Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5p.m. on April 29, 2021,” he had said.

First Bank had on Wednesday announced the appointment of Mr Gbenga Shobo as the new Managing Director and Chief Executive Director.

It had said that the appointment was subject to all regulatory approvals.

It had also announced that Shobo was succeeding Adeduntan who, it said, would be leaving the bank in accordance with the bank’s term limit for its chief executive after successfully leading the bank since January 2016.

These decisions will take effect from today, April 28, 2021,” it had said.

First bank had also appointed Mr Abdullahi Ibrahim as the Deputy Managing Director, while Mr Ini Ebong, Mr Segun Alebiosu, Mr Seyi Oyefeso and Mrs Bashirat Odunewu were also appointed as executive directors.

It had noted that the decisions were subject to all regulatory approvals.


Financial experts have said that the Central Bank of Nigeria (CBN), by wielding its big stick, would reduce the overbearing influence of directors on commercial banks.

They disclosed while reacting to the apex bank’s appointment of new Chairmen for First Bank of Nigeria Ltd and FBN Holdings Plc.

Mazi Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria (CIBN), said that the big stick would bring sanity among bank board of directors.

Unegbu said that the action would reduce overbearing influence and powers being exhibited by some commercial banks’ directors going forward.

He said that it would bring to an end the activities of powerful board directors in a corporation.

According to him, the decision and action will warn other people to be careful and to act within regulatory limit.

He, however, said that directors had the power to remove or appoint a managing director, but must obtain the approval of the apex bank before making the announcement.

Also speaking, Prof. Uche Uwaleke, President, the Association of Capital Market Academics of Nigeria, said that it was right for the CBN to wield the big stick on any bank that flours the rules.

Uwaleke said the action would serve as a lesson to the boards of other banks that similar fate awaits them if they take critical decisions bordering on board composition and corporate governance in general without prior approval of the CBN.

“A banking system regulator should be seen to take the issue of corporate governance very seriously.

“In this particular matter, my take is that the apex bank is in order in view of the fact that it gave the Board of FirstBank the opportunity to defend itself.

“It behoves the CBN now to communicate the reasons for its action to members of the public and provide reassurance of Banking system stability,” Uwaleke said.

The apex bank on Thursday announced the immediate removal of all directors of First Bank of Nigeria Ltd. and FBN Holdings Plc over purported management changes at the bank.

The CBN said that the decision was to protect minority shareholders and depositors.

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