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Board Dissolution: FBN Shares Drop By 6.75%

The share price of FBN Holdings (FBNH) Plc on the Nigerian Exchange Limited (NGX) in two days dropped by 6.75 per cent following the Central Bank of Nigeria’s (CBN) dissolution company’s board.

The share price of the holding company depreciated on Wednesday closed at N7.4 but dropped to N6.90 on Friday, according to the daily market report by NGX.

The share price drop of fall 6.76 per cent on Thursday is the highest drop since December 10, as the bank faced a stringent regulatory action by the apex bank.

Meanwhile, the domestic equities market closed transactions for the week on a positive note to extend the previous day’s positive sentiment, as NGX-All- Share Index (ASI) grew by 0.95 per cent and investors’ wealth rose by N195 billion.

The Central Bank of Nigeria Limited (CBN) reconstituted the Board of Directors of First Bank of Nigeria Limited.

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On April 29, 2021, the Boards of FBN Holdings Plc and First Bank of Nigeria Limited were dissolved and reconstituted, pursuant to its power under Banks and Other Financial Institutions Act (BOFIA) 2020.

The Board of Directors of First Bank of Nigeria Limited is now comprised as follows: Mr. Tunde Hassan-Odukale as Chairman; Tokunbo Martins; Uche Nwokedi; Adekunle Sonola; Ms. Isioma Ogodazi; Mr. Ebenezer Olufowose; Mr. Ishaya Elijah B. Dodo; Dr. Adesola Adeduntan as the managing director/ chief executive officer; Mr. Gbenga Shobo, deputy managing director; Dr. Remi Oni, executive director and Mr. Abdullahi Ibrahim, Executive Director.

The Bank said that Adeduntan has since resumed work as CEO in line with the directives of the CBN, saying “We can confirm that the Bank is co-operating with the Central Bank of Nigeria and other regulators while the operations of the Bank are not hampered or hindered in any way and are in fact running smoothly.

“We further wish to reassure the public, customers and stakeholders in the words of the Governor of the Central Bank in concluding his press conference, of its commitment to ensuring 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.”

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Speaking on the issue, CEO of Greenville Capital Limited, Azeez Bello said that the timely intervention of the Central Bank of Nigeria in the corporate governance issues within FBNH is quite commendable apparently because it is a systemically important bank.

According to Bello, investors appear to be satisfied with the apex banking regulators swift resolution hence the share price of FBNH was flat at N6.90 at the end of the today’s trading session, April 30, 2021.

“However , it is highly expedient that the CBN work closely with the Financial Reporting Council in the institutionalisation of sound corporate governance practices in our banking institutions.”

Also, the managing director, Highcap Securities Limited, Mr. David Adnori stated that the decline in share price of the Holdco is directly linked to the CBN action.

According to him, what happened with the FBN Holdco shares has to do with price sensitive development and it has taken a toll on devaluation of price because investor’s confidence has really shaken with the CBN revelation.

“In addition to what CBN has done with the removal of Mr. Oba Otudeko, the bank will then need to implement series of decision to restore investors and customers deposits confidence going forward.”

First Bank of Nigeria Limited (FirstBank) is the premier Bank in West Africa and the leading financial inclusion services provider in Nigeria for over 125 years.

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