By OLUSHOLA BELLO |
Shareholders of FBN Holdings (FBNH) have said the company and its subsidiary, First Bank of Nigeria, remain strong despite the the removal of its management by the Central Bank of Nigeria (CBN).
The shareholders noted that the early intervention of the CBN had saved the bank from crisis.
The apex bank recently removed the boards of FBN Holdings and First Bank and replaced them with new officials. The revelation by Central Bank Governor, Mr. Godwin Emefiele, that FirstBank had been under a regime of forbearance since 2016 and was peppered with problems of recovering insider-related loans was an admission of regulatory fogginess.
Emefiele in his announcement concerning the dissolution of the boards of FBN Holdings (FBNH) and First Bank on April 29, 2021, noted; “As you may be aware, First Bank 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, among others.
“By our last assessment, First Bank has over 31 million customers, with a deposit base of N4.2 trillion, shareholders’ funds of N618 billion and NIBSS instant payment (NIP) processing capacity of 22 percent 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.”
Speaking to LEADERSHIP Sunday, Mr. Adebayo Adeleke, a shareholder, said; “Following the CBN’s pronouncements and dissolution of the boards, the bank had issued a statement that its operations are going on smoothly. We do not expect any adverse effects on the bank. It is important that all hands are on deck to sustain this very great institution of 127 years serving over 30 million Nigerians.”
A shareholder, Mr Ambrose Omordion, said the appointment of a new management had calmed the issues on ground, urging the new management to be proactive in taking the bank to its next level and raise performance.
Head of Equity Trading, Planet Capital, Paul Uzum said the stock was the most volatile at the end of trading on April 30, 2021 transactions.
According to him, the stock depreciated by 10 percent at the beginning of trading to N6.25 kobo and subsequently recovered by 10 per cent in the course of the trading after some investors major shareholders decided to mop up the shares and increase their holdings.
“”The news of the dissolution of the board is such that people are looking at and they came out to buy. It is the most traded stock today.
“The rise in volume is abnormal, there is a major shareholder that decided to increase his stake to create that confidence that there is no cause for alarm. Some investors actually see it as an opportunity to consolidate and their stake.”
Speaking on the issue, CEO of Greenville Capital Limited, Azeez Bello, said the timely intervention of the CBN was quite commendable, apparently because it is a systemically important bank.
According to Bello, investors appear to be satisfied with the apex bank’s swift resolution, hence the share price of FBNH was flat at N6.90 at the end of trading on April 30, 2021.
“However, it is highly expedient that the CBN work closely with the Financial Reporting Council in the institutionalisation of sound corporate governance practices in our banking institutions,” he said.
Also, the managing director, Highcap Securities Limited, Mr. David Adnori, said the decline in share price of the Holdco was directly linked to the CBN’s action.
According to him, what happened with the FBN Holdco shares has to do with price sensitive development and it has taken a toll on devaluation of price because investors’ confidence has really shaken with the CBN’s revelation.
“In addition to what CBN has done with the removal of Mr. Oba Otudeko, the bank will then need to implement series of decisions to restore investors and customers’ confidence going forward,” he added.
…Awosika breaks silence after sack
Sacked former chairman of First Bank Nigeria Limited, Mrs. Ibukun Awosika, has said the decision to sack the reinstated managing director of the bank, Adesola Adeduntan, was taken in the best interest of the organization.
Awosika said she joined the bank’s board in October 2010 after which she was appointed to chair the board of FBN Life Insurance Limited.
The wielded the big stick on Awosika and chairman of FBN Holdings, Mr. Oba Otudeko, on Thursday.
It named Mr. Remi Babalola as replacement for Otudeko and Tunde Hassan-Odukale as Mrs. Awosika’s replacement.
Awosika, in a statement shared on Instagram, titled; “My FBN Group Journey”, stated that the decision to end the tenure of Adesola Adeduntan as the bank’s managing director was taken in the bank’s best interests.
But the CBN rejected the move by the bank’s board of directors. It argued that the tenure of Adeduntan was yet to expire.
“Together with the rest of our team we built a company that became profitable in twenty four months and continues to be so.
“We worked hard to build the institution, bought Kakawa Discount House which I was again asked by the Group to Chair.
“I am confident we have brought First Bank of Nigeria to a place where it is more than able to deliver utmost value to its stakeholders and the nation at large,” she said, adding that as a board, they acted in what they clearly believed to be in the best interest of the bank and had great plans and aspirations for where the bank could go to in its future.