Intrigues as control for First Bank heightens
Lender Confirms Otedola’s Acquisition Of 5.07% Equity Stake
The struggle to control of assets of Nigeria’s oldest bank, FirstBank Nigeria Limited at the weekend, heightened going by the twist of events and claims of new ownership structure.
Few months after the bank got enmeshed in financial conundrum and corporate war attributed to bad credit decisions, significant non-performing insider loans and poor corporate governance practices since 2016, the control for the Bank has been a top concern for insiders.
At the peak of its crisis in 2016, The Central Bank of Nigeria (CBN) took necessary intervention steps to prevent the bank from collapse and help it navigate its grave financial condition.
Some of the regulatory actions taken by the CBN include the change of management team under the CBN’s supervision with the appointment of a new Managing Director/ Chief Executive Officer in January 2016 and the grant of the regulatory forbearances to enable the bank to work out its non-performing loans through provision for write off of at least N150b from its earning for four consecutive years.
Following the apex bank’s interventions, some level of stability was restored to the bank as the financial condition of FBN improved progressively between 2016 when forbearance was initially granted.
But notwithstanding the significant improvement in the bank’s financial condition with the positive trajectory of financial soundness indicators, reported insider-related facilities remain problematic.
Some months ago, many were shocked when the CBN wielded the big stick with the sack the boards of First Bank Nigeria Limited and its holding company, FBN Holdco, citing insider abuse and corporate governance breakdown as reasons.
The apex bank also set up interim boards, reinstalling the ousted Managing Director/ Chief Executive, Dr. Sola Adeduntan and name Tunde Hassan-Odukale the interim board chairman of the bank.
The change followed hours of horse-trading and corporate war over the appointment of a new managing director. The board had appointed Gbenga Shobo as its Managing Director/Chief Executive to replace Adeduntan appointed in 2016.
Efforts made by the CBN made to compel the board to reverse its decision and reinstate the ousted chief executive proved abortive.
Consequently, the apex bank issued a query to the board when it failed to heed its advice. In a query letter to the bank, the apex regulator stated categorically that the board’s move had a dire consequence for the bank and portends significant risks to the stability of the financial system in the query letter.
As stakeholders were still nursing the shock the board dissolution, a new development emerged on Friday with strong indications that a billionaire businessman, Femi Otedola has acquired majority stake in FBN Holdings Plc.
Before now, another billionaire with significant interests in a telecommunications firm had been hinted to take over the chairmanship of the bank.
According to the online reports, Otedola, is now the single majority shareholder of the first generation lender in Nigeria with the acquisition of N30 billion worth of the bank’s equities at the NGX.
Surprisingly, barely 24 hours after it denied any notification of possible acquisition of shares by Otedola, the management of the bank yesterday confirmed that the business mogul and his nominee, Calvados Global Services Limited have acquired a total of 1,818,551,625 units of shares from the company’s issued share capital of 35,895,292,791.
In another statement signed by the Company Secretary, Seye Kosoko, yesterday, the bank affirmed that Otedola and his nominee now own 5.07 per cent equity stake in the bank.
With the development, Otedola has wasted no time in taking advantage of the leadership crisis that rocked the bank to become the single largest shareholder of FBN Holding Plc.
According to the statement: “We refer to our communication to the market dated October 22, 2021 on the above subject wherein we stated that we would inform the public of any substantial acquisition, upon receipt of notification from the Shareholder.
“This morning, October 23, 2021, FBN Holdings Plc received a notification from APT Securities and Funds Limited, that their Client, Mr. Otedola Olufemi Peter and his nominee, Calvados Global Services Limited have acquired a total of 1,818,551,625 units of shares from the Company’s issued share capital of 35,895,292,791.
“Based on the foregoing, the equity stake of Mr. Otedola Olufemi Peter and his nominee in the Company is now 5.07%.”
Sources said the bank needs a restoration of its leadership position it has envisioned in Nigeria and beyond.
Reacting on the development, a stockbroker and Vice Chairman of Highcap Securities, David Adonri said many things are brewing in the bank that will result in an outcome, which may be surprising to stakeholders.
He argued that with the bank’s financial crisis in 2016 to the dissolution of the board in April 2021 and now reports of Otedola’s acquisition of majority stake in the bank, more clarity on the happenings in the bank will unfold in due course.
“Otedola may have spotted an opportunity in the events that are happening and that has given him the impetus to make a daring move to take over the ownership of the bank.
“He is able to sniff out opportunity as they emerge, which he has done in time past. He is a seasoned business man that has been able to make other acquisitions that are beneficial.”
Adonri pointed out that the current events indicate that Otedola is set to take control of the bank by emerging as a single largest shareholder, noting that this signals the beginning of a new era for FBNH.
“The shares of FBNH are widely held and dispersed, if nobody else or group have what Otedola has, it means he is now a single majority shareholder. All we can expect is a restoration that will make the bank regain its leadership position and if this will happen under his ownership, it is a good step in the right direction,” he said.
The President of New Dimension Shareholders Association, Patric Ajudua pointed out that what is sustaining the bank currently is the intervention and forbearance granted by the CBN to reposition the bank in 2016
According to him it is not the number of times that changes have occurred in the bank that matters but how it has repositioned it to become more competitive in the industry.
He said: “Therefore, the coming on board of a new investor is to add more vigour and strength needed to speedily transform the bank and make it compete effectivetively in the banking space.”
Publicity Secretary of Independent Shareholders Association, Moses Igbrude believed that the bank has the wherewithal to handle any issue threatening its operations due to the number of years it has being in existence.
“We should not forget that First bank is over 125 years old. It is not out place for an institution as old as that to have issues or challenges.
“What matters is how the bank is able to manage and navigate these challenges which is what the board and management are doing presently.
“I strongly believe that First Bank has what it takes to handle any issue considering its long existence and wealth of experience acquired over the years,” he said.