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Why CBN sacked First Bank board — Emefiele (FULL TEXT)

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One of Nigeria’s tier-one financial institutions First Bank, has for years been plagued by “bad credit decisions, significant and non-performing insider loans and poor corporate governance practices”, the Central Bank of Nigeria has said.

The regulator sacked the board of the bank and its holding company on Thursday, in a dramatic move that came a day after the bank named a new managing director.

In a speech to journalists, CBN governor, Godwin Emefiele, said First Bank maintained healthy operations up until 2016 financial year when the CBN’s examination revealed that the bank was in grave financial condition with its capital adequacy ratio and non-performing loans ratio substantially breaching acceptable standards.

First Bank 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.

In his speech, Mr Emefiele announced the reinstatement of Sola Adeduntan as the managing director and chief executive officer of the bank, a day after he was removed by the board.

He said the regulator learned about the removal through the media.

Read Mr Emefiele’s full remarks below:

1.0 Good afternoon ladies and gentlemen.

2.0 The media has been awash with commentaries on the purported management changes at First Bank of Nigeria Ltd (FBN) and the related regulatory inquiry by the Central Bank of Nigeria (CBN) to the Board of First Bank of Nigeria Limited. It has therefore become necessary for me to address the public to clear any misconceptions.

3.0 Ordinarily the board is vested with the authority to make changes in the management team subject to CBN approval. However, the CBN considers itself a key stakeholder in management changes involving FBN due to the forbearances and close monitoring by the Bank over the last 5 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.

4.0 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 31m customers, with deposit base of N4.2trn, shareholders’ funds of N618bn and NIBSS instant payment (NIP) processing capacity of 22% 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.

5.0 The bank maintained healthy operations up until 2016 financial year when the CBN’s target examination revealed 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.

6.0 The problems at the bank were attributed to bad credit decisions, significant and non-performing insider loans and poor corporate governance practices. The shareholders of the bank and FBN Holding Plc also lacked the capacity to recapitalize the bank to minimum requirements. This conclusions arose from various entreaties by the CBN to them to recapitalize.

7.0 The CBN stepped in to stabilize the bank in its quest to maintain financial stability, especially given FBN’s systemic importance as enumerated earlier. Regulatory action taken by the CBN in this regard included:

i. Change of management team under the CBN’s supervision with the appointment of a new Managing Director/ Chief Executive Office in January 2016.

ii. Grant of the regulatory forbearances to enable the bank work out its non-performing loans through provision for write off of at least N150b from its earning for four consecutive years.

iii. Grant of concession to insider borrower to restructure their non-performing credit facilities under very stringent conditions.

iv. Renewal of the forbearances on a yearly basis between 2016 and 2020 following thorough monitoring of progress towards exiting from the forbearance measures

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8.0 The measures had yielded the expected results as the financial condition of FBN improved progressively between 2016 when the forbearance was initially granted to the current financial year. For instance, profitability, liquidity and CAR improved whilst NPL reduced significantly.

9.0 Notwithstanding the significant improvement in the bank’s financial condition with positive trajectory of financial soundness indicators, the insider related facilities remained problematic.

10.0 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

11.0 Following further review of the situation and in order to preserve stability of the bank, so as to protect minority shareholders and depositors, the Management of the CBN in line with its powers under BOFIA 2020 has approved and hereby directs:

i. Immediate removal of the all directors of FBN Ltd and FBN Holdings Plc

ii. The appointment of the following persons as directors in FBN Ltd and FBN Holdings Plc

Holdco

1. Chairman – Remi Babalola

2. Dr. Fatade Abiodun Oluwole

3. Kofo Dosekun

ⓘ

4. Remi Lasaki

5. Dr Alimi Abdulrasaq

6. Ahmed Modibbo

7. Khalifa Imam

8. Sir Peter Aliogo

9. UK Eke – Managing Director

Bank

1. Chairman – Tunde Hassan-Odukale

2. Tokunbo Martins

3. Uche Nwokedi

4. Adekunle Sonola

5. Isioma Ogodazi

6. Ebenezer Olufowose

7. Ishaya Elijah B. Dodo

8. Sola Adeduntan – Managing Director

9. Gbenga Shobo – Deputy Managing Director

10. Remi Oni – Executive Director

11. Abdullahi Ibrahim – Executive Director

12.0 The CBN hereby reassures the depositors, creditors and other stakeholders of the bank of its commitment to ensure 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.

CBN sacks First Bank and FBN Holdings directors

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The Central Bank of Nigeria, CBN, yesterday, removed the Boards of Directors of First Bank of Nigeria Limited and the FBN Holdings Plc.

The CBN also reappointed 14 out of the 21 directors affected by the sack into the new board of the two institutions.

The CBN also reinstated Mr Adesola Adeduntan as the Managing Director/Chief Executive of First Bank of Nigeria. Adeduntan was earlier sacked as MD by the former board of the bank.

Announcing the decision to sack the directors at a briefing in Abuja, the CBN Governor, Mr Godwin Emefiele said the apex bank had to remove the directors for trying to remove Adeduntan as MD without consulting the regulators.

Announcing the reinstatement of Adeduntan as MD, Emefiele said the CBN was satisfied with the work of the MD and those trying to remove him were the ones not comfortable with his insistence on adherence to regulations.

He said: “We retained him because we have worked with them since 2016 till now. What we saw there was a complete breakdown of governance and insider abuse by shareholders and we felt we have to stamp our authority and then give them a chance to continue to be MD.”

Emefiele said: “The media has been awash with commentaries on the purported management changes at First Bank of Nigeria Ltd, FBN and the related regulatory inquiry by the CBN to the Board of First Bank of Nigeria Limited. It has, therefore, become necessary for me to address the public to clear any misconceptions.

“Ordinarily, the board is vested with the authority to make changes in the management team subject to CBN approval. However, the CBN considers itself a key stakeholder in management changes involving FBN due to the forbearances and close monitoring by the Bank 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.

“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 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.

“The bank maintained healthy operations up until 2016 financial year when the CBN’s target examination revealed 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.

“The problems at the bank were attributed to bad credit decisions, significant and non-performing insider loans and poor corporate governance practices. The shareholders of the bank and FBN Holding Plc also lacked the capacity to recapitalize the bank to minimum requirements. These conclusions arose from various entreaties by the CBN to them to recapitalize.”

“Following further review of the situation and in order to preserve stability of the bank, so as to protect minority shareholders and depositors, the Management of the CBN in line with its powers under BOFIA 2020 has approved and hereby directs:

“Immediate removal of the all directors of FBN Ltd and FBN Holdings Plc;

“The appointment of the following persons as directors in FBN Ltd and FBN Holdings Plc;

The new directors of FBN Holdings Pls are: Chairman – Remi Babalola; Dr. Fatade Abiodun Oluwole; Kofo Dosekun; Remi Lasaki; Dr Alimi Abdulrasaq; Ahmed Modibbo; Khalifa Imam; Sir Peter Aliogo; UK Eke – Managing Director

The new directors of First Bank of Nigeria Limited are: Chairman – Tunde Hassan-Odukale; Sola Adeduntan – Managing Director; Tokunbo Martins; Uche Nwokedi; Adekunle Sonola; Isioma Ogodazi; Ebenezer Olufowose Ishaya; Elijah B. Dodo; Gbenga Shobo – Deputy Managing Director; Remi Oni – Executive Director; Abdullahi Ibrahim – Executive Director.

UBA’s chief marks first anniversary, promises enhanced customer service

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Mr Oliver Alawuba, Group Managing Director, United Bank for Africa (UBA), has reiterated the bank’s commitment to enhancing customer experience.

He also expressed optimism on greater achievements for customers and shareholders. In a statement signed by Mr Nasir Ramon, Group Head, Media and External Relations of Corporate Communications, UBA, in Lagos, Alawuba, was quoted to have said this while marking his first year anniversary in office.

He also promised investors and customers that the best is yet to come. The News Agency of Nigeria (NAN) reports that ‘UBA 4.0 Team’, led by Alawuba, took over the reins of leadership in August 2022.

According to him, the bank has since achieved record-breaking profit margins and witnessed transformative growth across the international and African markets.

Alawuba, who expressed gratitude to his team and other internal stakeholders for the many successes achieved in the last 12 months, said that through their collective efforts, the bank had celebrated major business wins across various markets.

This, he said solidified its position as a leading financial institution in the region. He said, “I want to express my gratitude to every one of you, our dedicated and talented team leaders and members for your commitment to our customer-centric vision and the spirit of execution displayed in our successes so far.

“Through our collective efforts, we have recorded major business wins across our various markets, improved on our financial performance, enhanced customer service delivery and are on the way to achieving a more connected brand.

“These achievements have not only strengthened the bank’s standing but have also provided a solid foundation for even greater accomplishments in the future,” Alawuba said.

The chief executive officer explained that the bank would not rest on its oars in its drive to deliver on its promise of being the leading financial services provider in Africa and beyond.

“We will continue to focus on our three levers of transformation, these being People, Process and Technology,” he added.

News Agency Of Nigeria

Despite his alleged bigotry, we thank El-Rufai for his brilliance and competence

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It was a piece of unbelievable news in the early hours of yesterday: that Nasir El-Rufai, one of the brightest brains deemed to be capable of championing brilliant ideas in the skewed administration of President Bola Tinubu, has been schemed out in an unceremonious manner.

The author of the book Accidental Public Servant and first-class graduate of the prestigious Ahmadu Bello University clinched the iconic “Barewa Old Boys’ Association Academic Achievement” owing to his outstanding academic achievement as a student of the prestigious institution. It is not expected that such a big fish would suddenly become the prey of a supposed cabal which suddenly became so powerful in the cabinet of President Tinubu.

President Tinubu has spoken well of this El-Rufai in several fora. In fact, he implored him to suspend his academic commitment abroad and join forces with his then-coming administration. So they could collectively rescue Nigeria.

My respect for El-Rufai started blossoming after I purchased his autobiography as a secondary school student. I was inspired by his big story of uncommon excellence at Barewa College, where a particular Mr Dehinnugbo, the sports master, inspired the students. Idanre-born Dehinnugbo also taught the generation of my father at the premier Olofin Anglican Grammar School, Idanre.

He must have goofed with his bigoted utterances, which successfully dwarfed his larger-than-life image in public places, including the commando style with which he dealt with the Shi’ia Muslims in Kaduna. Sheikh Elzakyzaky, the religious leader of what used to be the populous Islamic Movement of Nigeria, will not forget in a jiffy how the rogues acting on the order of the then-new government of El-Rufai besieged his home in Zaria in 2015, brutally wounded him and killed hundreds of his followers, including his children.

He, despite not being a saint, would not have given his prayer to the perpetuation of the dictatorial stance of Governor Nasir El-Rufai as a minister. After all, El-Zakzaky, at a public lecture, threatened to continue with the Jihad of Sheikh Usman Dan Fodio.

Without being swayed by El-Rufai’s many atrocities, he has done a lot to improve the condition of Kaduna people and Nigerians. I really could not come to terms with how his NSA mentee, Nuhu Ribadu, will willingly stampede his second shot at the ministerial position. Maybe he couldn’t overlook the weight of the many petitions against El-Rufai.

El-Rufai accommodated the newbie, Ribadu, on his appointment as the chairman of the maiden EFCC around December 2002 by President Olusegun Obasanjo. EFCC, at its inception, was without a physical office, including a space in the national budget. Nasir El-Rufai of the Bureau of Public Entreprises hosted the anti-graft office. The take-off fund was also contributed as a loan by the bureau under El-Rufai, who hid under the cloak of a section of the BPE Act which empowered him to support public parastatals created to track public properties and funds. I think he wouldn’t have willingly served as El-Rufai’s albatross.

Before speaking thus to the president: “It appeared you had reservations about me because you can’t claim not to be aware of the petitions,” he would have been really pained by what appeared to be the intention of the president to embarrass him.

He also spoke thus in his native Hausa language after he conceded his ticket to Jafaru Sani: “Walihi talahi ban na zon aiki dey shi ..true to God, I don’t want to work with him. It is Bola Ahmed Tinubu that wants me to work with him. I don’t want any government job. I have passed the stage where anybody can be my leader.”

El-Rufai challenged Buhari’s many obnoxious policies by suing or speaking out. He appeared to have called the bluff of President Buhari, just like he did to Late President Umar Musa Yar Adua. He would have attracted many enemies from these ends, just like his counterparts who did the same. He has a lot to regret owing to this national embarrassment.

Nigerians should, while punishing El-Rufai, remember how he also did well in some areas. During his tenure, In September 2015, the treasury single account policy was adopted, and the closure of 470 accounts belonging to various state departments and organisations resulted in the recovery of N24.7 billion, Kaduna State’s civil service was reformed. A reduction to 13 instead of 19 ministries and 18 instead of 35 permanent secretaries was implemented.

Some others are that the selection of only 12 assistants, ten special advisers, and 13 commissioners for the state was implemented, and no less than 1.5 million public school students received one free meal daily through the school feeding programme, saving N1.2 billion in two months. El-Rufai suspended the collection of fees and levies at public primary and junior secondary schools.

He performed wonderfully, too, as BPE director. He demolished many illegally constructed buildings while serving as the minister of the Federal Capital Territory. The course of history has showcased the man El-Rufai to be a stoic. It took him many months before Nigerian senators could confirm him as the minister of the Federal Capital Territory, alleging that it was because he refused to pay bribes requested by the senators. He revealed in his book how Vice President Atiku Abubakar paid the senators without his consent.

As much as I would like to scold him for his many bigoted utterances, I would also like to appreciate him for his courage. He must take his time to think through these experiences. The Kaduna people who have always supported him are the same people who have suddenly turned against him. He appears to have been savaged by the nemesis of his treatment of the Southern Kaduna people. Thank you, nevertheless, El-Rufai!

Finally, I am really wowed by his obsession with Uba Sani, Jafaru Sani, and other Sanis in Kaduna!

Tunde Akingbondere, an intern at the Falana & Falana Chambers, wrote from Lagos.

Shettima Lauds Google’s N1.2bn Grant Initiative

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Vice President Kashim Shettima has lauded Google’s N1.2 billion grant for the Tinubu administration’s 1 million jobs initiative.

The vice president stated this on Tuesday when he received in the audience some executives of Google – a leading global technology company, at the Presidential Villa.

According to the vice president in a statement , the announcement of a grant of N1.2 billion to support the Tinubu administration’s digital jobs initiative was commendable and worthy of emulation by other companies.

“Let’s think outside the box and create more job opportunities. We need to walk the talk. It is easy to pontificate but very difficult to bring all of the ideas to fruition. I want to assure you, this administration is ready to partner with you.

“Nigeria is ready for business. The President that we have now wants to leave a legacy that Nigerians will be proud of many years after,” the VP explained.

Speaking about the potentials of Nigeria’s young population, Sen. Shettima said “we have a unique opportunity to harness the potentials of our huge youth population to create millions of jobs in the digital sector.

“We have more English-speaking people than many countries in Africa and beyond. We missed the agricultural age, we missed the industrial age and we are now in the knowledge-driven post-industrial age. We have the potential and a unique opportunity to fill the anticipated global talent deficit.”

“Access Bank is doing a lot in terms of digital skills, training 1000 youths in digital skills to create employment opportunities.

We are working with Wema Bank, the Bank of Industry and other partners on this project. We are willing to partner with Google, we will work closely with you for the good of our nation,” he added.

Earlier in his remark, the director of Google West Africa, Mr Olumide Balogun said the company was excited about the Tinubu administration’s vision of creating one million digital jobs and was committing over N1.2 billion in grants to support the initiative.

He said the company through the programme would provide digital skills to over 20,000 youths and women to enhance and improve their lives and livelihoods, and also enable several startups to grow and create thousands of jobs in the sector.

On his part, Google Africa’s Director of Government Relations and Public Policy, Mr Charles Murito, said the company remains committed to investing in digital infrastructure across Africa, noting that digital transformation in the continent can be the driver of the targeted technology jobs.

He spoke about the potential in Africa, noting that “Google cannot achieve its vision and objectives if it doesn’t cover Nigeria effectively.”

The Google initiative is designed to train 20,000 Nigerian women and youth in digital skills. The programme is facilitated through a grant from Google’s philanthropic arm to “Mind the Gap” in partnership with Data Science Nigeria and the Creative Industry Initiative for Africa. This initiative aligns with President Bola Tinubu’s administration’s commitment to increasing the participation of young Nigerians in the digital economy by creating 1 million digital jobs.

The delegation from Google also includes, Programme Manager, Google Africa, Ms Oluwatamilore Oni; the Government Affairs and Public Policy Manager, Mr Adewolu Adene and Communications and Public Affairs Manager for Google West Africa, Mr Taiwo Kola-Ogunlade, among others.