Brands & Marketing

Rumpus in First Bank: How the Hunter Became the Hunted

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Even in the jungle, it is not uncommon to see the hunter become the hunted in the deadly game of survival. This is exactly what happened recently in Nigeria’s banking sector.

The recent dramatic changes that swept through Nigeria’s premier banking service provider, First Bank of Nigeria Limited and FBN Holdings took most observers by surprise. The CEO of the bank, Sola Adeduntan was removed and reinstated, before the entire board and management of the two institutions were sent packing by the Central Bank of Nigeria (CBN).

Insider information reveals that some powerful directors have always felt that there was a mole in the top echelon of the bank. This is because certain secret loan deals that may not meet the acceptable standard of good governance, involving influential directors, were always filtering to the regulatory body. This was despite the fact that they were all done with utmost care to ensure that the deals remain top secret among a few top players in the system.

It should be noted that this type of deals, which may run into millions or billions of naira sometimes, is quite common within the Nigerian banking industry. Individuals with controlling influence on the board will always ensure that loans and other funds are structured for their use, even with no sincere plan to adhere to the terms of such credit facilities. The Managing Director and his team are expected to look the other way or better still, cover the tract of such infractions to protect their jobs.

With the intermittent exposure of such activities in First Bank, a plan was hatched that led to the six-year tenure of the bank’s Managing Director/CEO, Sola Adeduntan brought to a sudden end, eight months to its expiration.

The Board of First Bank of Nigeria Limited at its meeting that eventful Wednesday had approved the appointment of Gbenga Shobo, Deputy Managing Director, as the Managing Director/CEO designate of the bank, sending Adeduntan to early retirement.

Also appointed were Abdullahi Ibrahim as Deputy Managing Director, while Ini Ebong, Segun Alebiosu, Seyi Oyefeso, and Mrs. Bashirat Odunewu, were appointed as Executive Directors.

It looked like a fantastic masterstroke in banking politics. What the plotters did not envisage was the fighting spirit and deep connections of a bruised Adedutan. Like a wounded Lion he responded swiftly, pulling all the strings within his disposal. Then suddenly, the hunter became the hunted.

The following day, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, not known for such swiftness and dexterity, akin to a roadside magician, reversed all the initial appointments and sacked the entire Board of First Bank and FBN Holdings Plc.

Sources in the bank claim that the entire operation happened after two or three calls from some “ogas at the top”.

Emefiele promptly announced the appointment of a new Board and Management for First Bank of Nigeria Limited and FBN Holdings Plc.

The total management and board reshuffle saw Adeduntan returned as the Managing Director/CEO of First Bank of Nigeria. Emefiele said he was satisfied working with Adeduntan on the bank’s stabilisation plan since 2016. Shobo was also returned to his former position as Deputy Managing Director/CEO for the bank.

Read Also: Banking: Gritty Games of Wits to Stay Afloat in 2020

For the Holdings, the new board approved by CBN has Remi Babalola as chairman, U.K. Eke as managing director. Fatade Abiodun Oluwole, Kofo Dosekun, Remi Lasaki, Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam and Sir Peter Aliogo are equally members.

For the bank, Tunde Hassan-Odukale is now to serve as the chairman. Sola Adeduntan is back as the managing director. Gbenga Shobo is the deputy managing director. Remi Oni serves as executive director, Abdullahi Ibrahim as executive director.

Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, and Ishaya Elijah B. Dodo are also members.

Emefiele said the CBN stepped in to stabilise the bank in its quest to maintain financial stability, especially given FBN’s systemic importance. He also said the Management of the CBN acted in line with its powers under Bank and Other Financial Institutions Act (BOFIA) 2020.

In the words of the CBN boss: “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 recapitalise the bank to minimum requirements. These conclusions arose from various entreaties by the CBN for them to recapitalise.”

The CBN governor gave other reasons for the sharp intervention to restore Adeduntan and the prompt sacking of all First Bank, and FBN Holdings board members

According to the CBN Governor, Godwin Emefiele, the sack of the two boards was necessary to ensure stability in the banking system. He also claimed that if the CBN did not react swiftly, the decision of the bank could have crumbled the oldest bank in Nigeria.

His words: “For Sola Adeduntan to be removed without due notice to CBN was completely wrong.

“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.

Emefiele also pointed out that the ten-year tenure of Adedutan was yet to expire and that there were no reports of any misconduct to necessitate his removal.

He pointed out that the 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 22 per cent of the industry. Emefiele said it is 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 First Bank as a safe haven for their hard-earned savings.

However, the sacked Chairman of First Bank Nigeria Limited, Mrs. Ibukun Awosika, has insisted that based on all available information she acted in truth and honesty in the interest of the bank, its stakeholders, and Nigeria all through her 11-year sway at the institution. Awosika stated this in a statement titled, “My FBN Group Journey,” released last weekend. Part of Awosika’s statement reads:

“As a board, we acted in what we clearly believed to be in the interest of the bank and we had great plans and aspirations for where the bank could go to in its future, building on all the work that has already been done in the last five-plus years.

“Without a shadow of doubt, I will unequivocally state that I have acted in honour and integrity with the utmost interest of the institution, all our stakeholders, and the nation.”

One of the companies speculated to be a beneficiary of the insider loan deals, Honeywell Flour Mills, owned by one of the sacked board members, Oba Otudeko has responded to the claims that it defaulted on its loans from First Bank of Nigeria.

In a statement signed by its company secretary Yewande Giwa, the food and the agro-allied company said the outstanding loan with the bank is based on agreed terms:

“With reference to the credit facility with First Bank of Nigeria (FBN); over many decades, the company has had a long standing, mutually beneficial credit relationship and continues to fulfill all its obligations to the bank, and all its facilities are fully performing.

“The terms of the loan with FBN have been fulfilled in line with industry standards and in accordance with agreed terms throughout its course, and the Company expects to continue to do so.

“We remain committed to complying with regulations governing our industry and our obligations to First Bank and our various financial counterparts.”

However, many financial analysts believe that what is happening at FirstBank is just the tip of the rotting iceberg in Nigeria’s financial system. The President, Bank Customers Association of Nigeria (BCAN), Uju Ogubunka, feels the challenges in FirstBank should have been tackled earlier by the CBN even before it got to this period:

“I expect the CBN to be more proactive going forward. The level of insider loan abuses seen in FirstBank is an indicator of regulatory negligence in the entire banking sector. The perpetrators and the directors involved in the insider loan abuse should have been sanctioned before now. Supervisory roles of the regulator should be more proactive going forward.”

The revelation that FirstBank was almost on live support since about six years ago shows that there are several issues creeping behind the current facade of finicky corporate ethics.


While Emefiele’s swift action to remove the Boards of FBNH and First Bank could be understandable, it has thrown up issues that run deeper than the simple substitution of personnel, and speaks to the heart of the stability and integrity of Nigeria’s financial system. Imagine those who keep their entire savings and income of their companies knowing that some director has been receiving for years, loans worth millions of naira with no plan to serve them.


Following Emefiele’s speech, the regulator mentioned that First Bank had enjoyed financial forbearance from the CBN for five years since 2016. Analysts that reviewed the Audited Annual Accounts of the bank noted that the CBN forbearance programme was not disclosed anywhere in the bank’s accounts over the past five years.


By not mentioning this material fact, First Bank had misled the financial market in general, and the stock market about its state of financial health, thereby resulting in a situation where its traded share price on the floor of the Nigerian Exchange Group, did not reflect the bank’s intrinsic value. It was also a breach of best global governance practice.

The First Bank issue obviously goes well beyond the mere underhand removal of the bank’s Managing Director by an allegedly compromised board and a heavy-handed dominant shareholder. It raises more questions on the extent the public can trust the integrity and representation of the annual financial statements of banks monitored by the CBN.


In a properly governed financial system, a bank like First Bank, with serial negative shareholder’s funds should have been taken over by the regulators a long time ago. Why are the forbearance statuses of banks not made public to guide rating agencies, investors, and other prospective creditors of the institution on a fair value assessment of a bank’s assets and liabilities?


It is also quite regrettable that supposedly wealthy and successful Nigerian business persons are the heaviest loan defaulters, some of whom have the capacity but lack the willingness to repay loans collected from banks. Bank directors with such instincts, like it happened in First Bank, should be promptly shown the way out.

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