The most alarming paragraph in the statement released by CBN regarding First Bank.

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

https://www.vanguardngr.com/2021/04/cbn-sacks-first-bank-directors-retains-adeduntan-as-md/

So if the insider loans close to N100 billion go bad, First Bank has no collateral to recover it. How can management be this reckless regarding insider loans. CBN stepped in right in time to save depositors funds.

mehh!
insider loans to the tune of #100 billion unpaid
the have killed the bank now

T

baralatie:
mehh!

insider loans to the tune of #100 billion unpaid

the have killed the bank now

We further noted that in four years, the bank is yet to perfect its lien on the shares of Mr Oba Otudeko in FBN Holdco which collateralised the restructured credit facilities for Honeywell Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.”

One report from 2017 claims that the loan facility is in the region of ₦75 billion and was non-performing before a recent restructuring. Yet, the apex bank is concerned that First Bank may not have performed its due diligence in securing the collateral for the credit facility.

This is just one director.


https://techcabal.com/2021/04/29/cbn-first-bank-otudeko/

Is First Bank going down?

What manner of fuckery is First Bank engaging in like this? I thought given their long antecedents, the bank should not be joking with investor funds and putting them into this kind of financial risk.The CBN really needs to investigate these fraudulent MDs

Racoon:
What manner of fuckery is First Bank engaging in like this? I thought given their long antecedents, the bank should not be joking with investor funds and putting them into this kind of financial risk.The CBN really needs to investigate these fraudulent MDs

CBN reinstated the sacked MD, it was others member of the board that were responsible for the insider loans ,who felt they could pay it back at their own convenience, despite the fact it may lead to liquidity issues for the bank. However, I don't see how the reinstated MD can't be held complicit for failing to have collaterals perfected on the insider loans.

This is a really bad look for First Bank, and depositors and investors alike will be shocked at the poor corporate governance structure of the bank. They seemed to learn little to what happened to Oceanic and Intercontinental Bank.

jlinkd78:
Is First Bank going down?

First Bank is to big to fail with 31 million depositors. The CBN will step in if they face liquidity issues.

CBN is also to blame, how come they waited three years to take action against the management. They refused to take action on several reminders sent to them to perfect collateral and lien on shares of the directors with insider loans and divest from non-permissible holdings.

The directors that obtained the insider loans wanted to eat their cake and have it. They were acting like that annoying friend you borrow money to,who you see partying and buying a new car,at a time you need the money repaid to meet up with urgent commitments.

Forget all these long grammar this loan nhas been there for years and was paid off using stock options ( story for another day)...let's be careful and not get emotional, what just happened was a hostile takeover of Nigeria a biggest bank by Fulanis using the CBN .. What role did Abdul Muttalab ( father of the panty bomber) play in this? We will find out in the coming days )

FarahAideed:
Forget all these long grammar this loan nhas been there for years and was paid off using stock options ( story for another day)...let's be careful and not get emotional, what just happened was a hostile takeover of Nigeria a biggest bank by Fulanis using the CBN .. What role did Abdul Muttalab ( father of the panty bomber) play in this? We will find out in the coming days )

I see Abdul Muttalab was part of the interim management appointed to oversee First Bank. However, I mostly saw Yoruba names in the interim management.

Do you have proof that is not available to CBN, that the insider loans were paid through stock options. That may be another fraudulent means that may not be recognized by the CBN as a means of paying back an insider loan .Were the stock options issued from companies owned by the directors that obtained the insider loans or companies they had arm's lengths transaction is the question.

I also want to point out that if it was a hostile takeover by the so called Fulanis, CBN won't have reinstated the former Managing Director,Mr Adesola Adeduntan.

In the other news!

Ever since the time of Soludo, Godwin Emefiele is the only CBN governor that Nigerians didn't feel his positive impact in the banker's bank.

Soludo strengthen Nigerian banks while Sanusi, though controversial, implemented key reforms, including standardizing all account numbers to 10-digit number. In fact, Sanusi went about sharing money up and down. I remember him giving bomb blast victims 100m in Kano State.

Lastly, much as Godwin Emefiele has been there for several years, we have yet to see far-reaching reforms that affect Nigerians directly.

RuudVanNisteroy:

I see Abdul Muttalab was part of the interim management appointed to oversee First Bank. However, I mostly saw Yoruba names in the interim management.

Do you have proof that is not available to CBN, that the insider loans were paid through stock options. That may be another fraudulent means that may not be recognized by the CBN as a means of paying back an insider loan .Were the stock options issued from companies owned by the directors that obtained the insider loans or companies they had arm's lengths transaction is the question.

The CBN knows the loan in question was paid off in stock options but advised FBN to liquify those options four years ago and divest because it didn't look morally right ...For four years FBN has delayed divesting citing many economic reasons ....see i know the FBN well enough to know this is an Abdul Muttalab takeover

FarahAideed:


The CBN knows the loan in question was paid off in stock options but advised FBN to liquify those options four years ago and divest because it didn't look morally right ...For four years FBN has delayed divesting citing many economic reasons ....see i know the FBN well enough to know this is an Abdul Muttalab takeover

Why didn't they liquify the stock options despite being reminded for three years. You know stock options can go underwater and never be recoverable.

The economic reason First Bank cited should have been an added incentive to liquify the stock options. Where the stock options originated from likely wasn't morally right to be used as a collateral.

RuudVanNisteroy:

Why didn't they liquify the stock options despite being reminded for three years. You know stock options can go underwater and never be recoverable.

The economic reason First Bank cited should have been an added incentive to liquify the stock options. Where the stock options originated from likely wasn't morally right to be used as a collateral.

Even loans can go under and never be recovered and this every banks risk assessment unit knows...for years I have been against Otudekos cunning move to offset his loans using stocks but that one is another story for another day ...my concern now remains that Nigerias biggest bank is not handed over to Jihadists on a platter of emotional sentiments just like we handed the country to them

FarahAideed:


Even loans can go under and never be recovered and this every banks risk assessment unit knows...for years I have been against Otudekos cunning move to offset his loans using stocks but that one is another story for another day ...my concern now remains that Nigerias biggest bank is not handed over to Jihadists on a platter of emotional sentiments just like we handed the country to them

I suspected it was the way he used stock options to pay off the insider loans that raised eyebrows with CBN. The stock options used from whatever private or public company based on CBN assessment will not likely have been recoverable.

If CBN was going to approve the use stock options, it had to be from a stable company and not one the share price fluctuates constantly.