From Uche Usim, Abuja
The Central Bank of Nigeria (CBN) Thursday, announced the immediate dissolution of First Bank Limited board led by Mrs Ibukun Awosika, over governance issues, and ordered the immediate reinstatement of Dr Sola Adeduntan. It also dissolved the board of its Holding Company.
The apex bank’s action followed its query on the Board of First Bank Limited for carrying out major board and management changes without securing regulatory approvals.
Addressing the media on Thursday, the CBN Governor, Mr Godwin Emefiele, named Mr Tunde Hassan-Odukale as Chairman of First Bank, while reinstating Sola Adeduntan as Managing Director; Gbenga Shobo, Deputy Managing Director; Remi Oni, Executive Director; Abdullahi Ibrahim, Executive Director; withTokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose and Ishaya Elijah B. Dodo are board members.
For FBN Holdings Plc, the Chairman is Remi Babalola with Urum Kalu Eke as Managing Director among seven other members.
Emefiele lamented that 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 restructuring terms (including non- perfection of lien on shares/collateral arrangements) for over three years despite several regulatory reminders. The bank has not also divested its non-permissible holdings in non-financial entities in line with regulatory directives”.
Emefiele pointed out that the CBN considers itself a key stakeholder in management changes involving FBN due to the forbearances and close monitoring by it 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.
“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”, Emefiele said. He noted that FBN IS 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 a deposit base of N4.2 trillion, shareholders funds of N618 billion and NIBSS instant payment (NIP) processing capacity of 22per 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 31m customers of the bank who see FBN as a safe haven for their hard-earned savings.