The Central Bank of Nigeria (CBN), has directed the immediate removal of all Directors of First Bank Nigeria Limited and First Bank of Nigeria Holdings Plc.
The CBN Governor, Mr. Godwin Emefiele who in the early evening of Thursday, April 29, sacked the Directors, noted on Twitter that the apex bank acted to protect 31 million customers, and minority shareholders of First Bank of Nigeria Ltd.
Emefiele who also announced the sack on live television, in his speech, cited insider abuse, insider credit and breakdown of corporate governance as the reason behind the move.
Recall that the CBN had queried First Bank, expressing concern that the appointment of Gbenga Shobo was done without the approval of the apex bank, and also claimed that the tenure of the ousted Dr Adesola Adedutan was yet to expire and as such, there was no justification for his removal.
In the press briefing on Thursday evening, Mr Emefiele stated that the apex bank had been keeping close tabs on First Bank Nigeria over the past 5 years having discovered 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.”
In his words, “The insiders who took loans in the bank, with controlling influence on the board of directors, failed to adhere to the terms for the restructuring of their credit facilities which contributed to the poor financial state of the bank.
“The CBN’s recent target examination as at December 31, 2020 revealed that insider loans were materially non-compliant with restructure terms (e.g. non perfection of lien on shares/collateral arrangements) for over 3 years despite several regulatory reminders. The bank has not also divested its non-permissible holdings in non-financial entities in line with regulatory directives.”
Following the latest action of the Board of FBN Ltd in ousting Dr Adeduntan and replacing him with his deputy, Mr Gbenga Shobo outside of the apex bank’s consent, the CBN took the decision to issue all members of the Board of FBN Ltd and FBN Holding company, a red card, naming an interim Board headed by the now reinstated Dr Adeduntan.
In a series of tweets released by the apex bank on Thursday evening via its official Twitter handle, the CBN reassured “First Bank of Nigeria depositors, creditors and other stakeholders of the bank of its commitment to ensure the stability of the financial system.”
Emefiele further said that First Bank of Nigeria is one of Nigeria’s systemically important banks given its historical significance, balance sheet size, large customer base and high level of interconnectedness with other financial service providers.
Furthermore, the CBN governor announced the reinstatement of Sola Adeduntan as Managing Director; Gbenga Shobo as Deputy Managing Director; and Remi Oni and Abdullahi Ibrahim as Executive Directors of First Bank of Nigeria Limited.
CBN also approved the appointment of Remi Babalola as Chairman FBN Holdings Plc. Dr. Fatade Abiodun Oluwole, Kofo Dosekun, Remi Lasaki, Dr Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam, Sir Peter Aliogo, and UK Eke (Managing Director) as Directors of FBN Holdings Plc.
The apex bank also approved appointment of Tunde Hassan-Odukale as Chairman of First Bank of Nigeria Limited, and Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo as Directors of First Bank of Nigeria.