CBN Removes Newly Appointed CEO of First Bank Nigeria

The Central Bank of Nigeria (CBN) on Thursday, April 29th, removed the newly appointed CEO of First Bank Of Nigeria Plc, as well as the board of directors of FBN Holdings.

In a briefing in Abuja, Godwin Emefiele, CBN Governor, announced the decision to remove the newly appointed CEO Gbenga Shobo, and reinstate the former CEO, Adesola Adeduntan who was forced out of office 6 months before his official retirement date.

According to him, this action is necessary to protect the minority shareholders and customers of the companies. He said the central bank was satisfied with the quality of work and ethics of former CEO Adesola Adeduntan, and the only reason for his removal was that he insisted on adhering to regulations. The CBN had warned the bank on Wednesday that disciplinary action would be taken unless a valid explanation for the removal was given.



On Wednesday, the board of directors of First Bank, and FBN Holdings, announced that it had appointed Gbenga Shobo as its Managing Director/Chief Executive Officer (CEO). Godwin Emefiele interfered, warning that the central bank wasn't aware of the transition and that it was carried out without approval from the regulatory bank. The board, led by Oba Otudeko, ignored the warnings of the central bank.

Oba Otudeko, who was chairman of First Bank, before stepping in as chairman of FBN Holdings since 2010, has reportedly used his position to incur loan of up to N75 million, in "insider lending." This is when a bank gives a loan to one of its directors or officers. It is usually subject to strict regulations, under a condition that the officer/ director must receive no preferential treatment. That has not been the case with Otudeko.

Worse, the collateral for this loan are his Airtel shares, which turn out to be the same collateral used for a loan he obtained from Ecobank in 2013.

The central bank has ordered Otudeko to repay the loan in the next 48 hours, after sacking him, along with Ibukun Awosika, Chairman of First Bank Plc, from their positions of board chairmen. Remi Babalola, former minister of finance, and Tunde Odukola, have been appointed by the central bank to replace them as Chairman of FBN Holdings, and Chairman of First Bank, respectively.

“We will not allow a shareholder who feels he will not subject himself to regulatory control and authority to remain as a director of the bank,” Godwin Emefiele said while explaining the incident.



The full text of the governor's speech is below :


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.


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 a regulatory forbearance regime had effected sweeping changes in executive management without engagement and/or prior notice to the regulatory authorities. 


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 a 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 haven for their hard-earned savings.

Be the first to comment!

You must login to comment

Related Posts