Analysts and corporate governance experts are beginning to weigh in on the ripples at First Bank of Nigeria.
With sections of the Board pitched against one another and the Central Bank of Nigeria intervening to avert a full-blown crisis, findings have revealed that corporate governance issues were at the centre of the squabbles witnessed at the lender.
The issue of weak corporate governance is not new in the banking sector in Nigeria, considering the ownership structure of most Nigerian banks before recapitalisation.
The structure then was such that the then Governor of the CBN, Chukwuma Soludo, described the banks as mere commercial shops.
The palpable air of confusion among the stakeholders of First Bank Group, created by the CBN’s sacking of the board over the removal of the Managing Director/Chief Executive of the bank, Adesola Adeduntan, may have calmed, as the bank has bowed to changes made by the apex bank.
Reacting to the development, First Bank, at the weekend, embraced changes by the CBN, just as the financial institution disclosed that Adeduntan had resumed office as CEO.
The bank, in a statement signed by its Group Head, Marketing and Corporate Communications, Folake Ani-Mumuney, reassured depositors and shareholders of the safety of their funds and investment.
The statement said the CEO “has since resumed work as CEO in line with the directives of the CBN. We can confirm that the bank is cooperating with the CBN and other regulators while the operations of the bank are not hampered or hindered in any way and are in fact running smoothly.
“We further wish to reassure the public, our esteemed customers and stakeholders in the words of the Governor of the CBN in concluding his press conference, ‘The CBN hereby reassures the depositors, creditors and other stakeholders of the bank of its commitment to ensuring 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.’”
Recall that the CBN had removed all directors of First Bank and those of its parent company, FBN Holdings Plc, to stave off a boardroom crisis that led to the short-lived retirement of Adeduntan.
Also, the CBN Governor, Godwin Emefiele, appointed a former Minister of State for Finance and former Executive Director of First Bank, Remi Babalola, as Chairman of FBN Holdings in place of Oba Otudeko, who was sacked.
Other new directors on the FBN Holdings’ board include Fatade Oluwole, Kofo Dosekun, Remi Lasaki, Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam and Peter Aliogo.
UK Eke retained his position as Managing Director of FBN Holdings, even as First Bank Nigeria Limited’s new Chairman is Tunde Hassan-Odukale, who replaced Ibukun Awosika.
Other members of the board include: Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo and Adeduntan.
Gbenga Shobo, Deputy Managing Director; Remi Oni and Abdullahi Ibrahim, who are executive directors, are members of the reconstituted board.
However, former First Bank Chairman, Awosika, has reacted to the sack of the board by the CBN.
Awosika insisted that the board acted in the best interest of the bank in its decisions, with great plans for the future.
The capital market, however, reacted differently as investors still chased after the shares of the bank.
On Friday, the price remained unchanged despite 95.28 million of its shares, valued at N641.15 million, that changed hands in 663 deals.
This was after the CBN announced the re-instatement of Adeduntan as the Managing Director, dissolved the board of the bank as well as the holding company, and announced a new board.
Many of those who reacted to the development were of the view that the bank would overcome the crisis.