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The Curious Case Of First Bank - Business - Nairaland

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The Curious Case Of First Bank by JPhilip: 5:31pm On May 02
First Bank has for the longest time been the most trusted and recognizable name in the Nigerian banking landscape. This was borne out of the fact that it was the first bank to be established in Nigeria initially called British Bank of West Africa (BBWA) under royal charter.

As the oldest bank in the country for over 120 years, it had certain advantages many other banks do not have. Some of those include a loyal customer base and deep networks across both the public and private sectors. Just to prove the strength of the bank’s connections, since the return of democracy in 1999, 2 of the 4 Central Bank of Nigeria (CBN) governors have been former Managing Directors of the bank. Other directors have ended up being appointed either Ministers or other significant political appointments.

The case of the last week with the ouster of the MD, Dr. Sola Adeduntan by the Oba Otudeko-led board is akin to what might be termed a coup as it was not sanctioned by the regulator. The CBN performed its duty by rightly rescinding the action of appointing the Deputy MD, Mr Gbenga Shobo and sacking the entire Board at both the Holdings and Bank level. The action by the Otudeko board was in breach of laid down procedures where to appoint or sack a bank director, it must be approved by the CBN. It is common knowledge that even from the Assistant General Manager level in the banking industry requires CBN approval, so this case of appointments is highly unusual.

The question many have asked is how did First Bank get here? And it just takes going back barely two decades. In 2001, the former MD, Mr Bernard Longe alongside the Board approved a loan of $112m to Investors International of London (IILL) to purchase a GSM licence. The bid went South, IILL was unable to perform on its loans and Bernard Longe was to be made out as a scapegoat by the Board and was sacked. He took the bank to court, won and received a compensation.

The drama of Otudeko owing the bank and allegedly abusing his position is no different. It stems from the heady days of Mr Bisi Onasanya who oversaw the expansion of a Non Performing Loan (NPL) book like never seen in the history of the Nigerian banking industry. According to some estimates, the total NPLs under his watch is about 1.3 trillion naira. Many of the loans were originated deliberately to go bad with some members of the Board benefiting directly. Otudeko was one of those with a loan portfolio of what is estimated to be 75 billion naira. The collateral behind these loans are said to be Honeywell shares and Airtel shares owned by Otudeko. However, despite regulatory forbearance, Otudeko refused to pay up on these loans despite being the Chairman of the bank. The culture of bad loan writing seems embedded in the DNA of the bank.




It is very worrisome that board members who are also majority shareholders and should be acting in the best interests of minority shareholders only view the bank as an avenue to funnel resources to their other businesses without paying up. There are those who say the bank is a political party masquerading as a bank divided along factions swaying to what faction of the party is in power. There are suggestions that Mike Adenuga (another major shareholder) is the backer of the current MD, Dr. Sola Adeduntan and has rebuffed attempts by Otudeko to avoid meeting his loan obligations.

But what is even most curious is the blatant disregard that Otudeko seemingly has for the CBN Governor. In his speech announcing the re-appointment of Dr. Sola Adeduntan, Godwin Emefiele said, “I spoke to Mr. Oba Otudeko , he refused to grant my entreaties. I had to call two of his major shareholders to call him to ask the board not to take such decisions without the approval of the CBN. He refused to pick the calls of these shareholders — who are also owners of the bank. I feel we have done our best and we would not allow a shareholder who cannot subject himself to regulatory control and authority to remain as the director of a bank.”

While we must commend the boldness of the CBN to take this step now, we must also ask why it took this long to sack Otudeko as Chairman of the bank. In a bank that has been a recipient of liquidity support and regulatory forbearance, directors cannot operate as they choose. Had Otudeko not gone ahead with his coup, would he still be Chairman? How many more banks are their Non Perfoming Loans understated? How fragile is the entire banking system? These are the questions that demand answers and go beyond just the curious case of Otudeko and First Bank of Nigeria.

https://www.herald.ng/the-curious-case-of-first-bank/

22 Likes 5 Shares

Re: The Curious Case Of First Bank by Luvlyfal(f): 6:09am On May 03
Booking first

It's just shameful what Nigeria as a whole has become, nothing seems to be working. The banking system, security, leadership, etcetera. Really hope things gets better soon.
Re: The Curious Case Of First Bank by oluwaseyi0: 6:09am On May 03
How they attempt to run the bank is how most public institutions are being run

Individuals having complete disregard for regulatory bodies and regulatory bodies staff only after their private pockets

Nice one from emefiele, you did well

30 Likes

Re: The Curious Case Of First Bank by MANNABBQGRILLS: 6:10am On May 03
#RESPECT

Tareq1105:
Great women.
You can say that again Sir T!

8 Likes 2 Shares

Re: The Curious Case Of First Bank by adewumiopeyemi(m): 6:11am On May 03
Make i go withdraw my money from first bank

2 Likes

Re: The Curious Case Of First Bank by adewumiopeyemi(m): 6:11am On May 03
MANNABBQGRILLS:
Reading


Who cares

17 Likes 1 Share

Re: The Curious Case Of First Bank by Eeroh95(m): 6:12am On May 03
ok
Re: The Curious Case Of First Bank by abbeyloyee(m): 6:13am On May 03
kissNa so
Re: The Curious Case Of First Bank by pointstores(m): 6:14am On May 03
Nawa
Re: The Curious Case Of First Bank by TOPCRUISE(m): 6:15am On May 03
First bank democratic Party.
Running first bank is like running NNPC. It's the NNPC of Nigerian banks

14 Likes 1 Share

Re: The Curious Case Of First Bank by nonireel(m): 6:15am On May 03
op, learn to take info released by the media with a pinch of salt.
there's always more 'goings-on' than they let on.
this is Nigeria.
*scratch that*
this is zombie nation.

6 Likes

Re: The Curious Case Of First Bank by FarahAideed: 6:16am On May 03
CBN sponsored

1 Like

Re: The Curious Case Of First Bank by poiZon: 6:17am On May 03
JPhilip:


https://www.herald.ng/the-curious-case-of-first-bank/
Nigeria hasnt had it this bad before...
When they came with change, we felt it.
They now talked of next level, everything went south..
We r now in a jungle struggling to survive.
God see us thru these times cos its only you who holds the �
Re: The Curious Case Of First Bank by Bleiz(m): 6:19am On May 03
Everyone is looking for an opportunity to cash out.
Re: The Curious Case Of First Bank by NLPoliceWoman: 6:21am On May 03
RTR
Re: The Curious Case Of First Bank by OkCornel(m): 6:24am On May 03
Abuse of power and money.

So the lifestyle of the “wealthy” Otudeko is financed by bank loans collaterized with his shares in Honeywell and Airtel?

Truly, not all that glitters is gold.

Look beyond the illusions and see who really has the treasures.

12 Likes

Re: The Curious Case Of First Bank by WiszyFraud: 6:25am On May 03
Did you know??

Be thankful for all the struggles you go through. They make you stronger, wiser and humble. Don't let it break you let it make you.


cool

10 Likes

Re: The Curious Case Of First Bank by Abdulquadrimuha(m): 6:25am On May 03
Every sector in are the same
Re: The Curious Case Of First Bank by dahmie2013: 6:25am On May 03
Nice article.
Re: The Curious Case Of First Bank by sirmustyla(m): 6:26am On May 03
I thought loans are supposed to insured and there is also collaterals in cases of continuous default. Why do we keep having so much npls? Same way they claimed to be regulating Savannah Bank until the bank packed up in 2001 and till date depositors can not get their money. These people are all criminals and cultists including the CBN man.

5 Likes

Re: The Curious Case Of First Bank by ubaobi: 6:27am On May 03
They collect all the profit at the top and still pressure the staff to make more , always declaring low Profit. Even contract staff are paid peanuts while they allocate bogus loans to themselves. Monkey dey work baboon dey chop

21 Likes 1 Share

Re: The Curious Case Of First Bank by stano2(m): 6:28am On May 03
My first bank has been frozen since 3weeks now, open my account..wahala.
I have submitted everything required still my account is inaccessible

1 Like

Re: The Curious Case Of First Bank by EtherconnectNG(f): 6:30am On May 03
It is our believe that the financial system of Nigeria is more or less run like a drug cartel system. Where the baron is the chairman, if this is happening in first bank just imagine other banks!

The financial system of Nigeria is already a failed system. No amount of sacking can remedy it.

Decentralised Finance is the only way

7 Likes 1 Share

Re: The Curious Case Of First Bank by omoiyalayi(m): 6:32am On May 03
All dis so called big men are not so big after all

Imagine d impunity

If we all decided to withdraw our money from their bank that means they will be left with nothing

They are not different from our politicians

Bunch of thiefs

6 Likes

Re: The Curious Case Of First Bank by sofeo(m): 6:33am On May 03
OK.
Re: The Curious Case Of First Bank by gabicon: 6:34am On May 03
It's increasingly becoming difficult to identify business persons in Nigeria who make their money in a legit way. I ask this question most of the time, "why don't Nigeria business people write books on how they achieve success in business like their foreign counterparts?". The answer is simple, there is a lot of cutting corners in the journey, someone gets a loan of 95 billion naira that he is unwilling to pay back, while there is someone needing 10million naira that he would sure pay back but is classified as not credit worth. We run a broken system in Nigeria that benefits a social political class, the reason why things are presently falling apart is because this class has not allowed the monies to trickle down.

28 Likes 3 Shares

Re: The Curious Case Of First Bank by Dialpad: 6:35am On May 03
The entire Nigeria needs a complete overhaul. In saner climes, these people should be in prison

2 Likes

Re: The Curious Case Of First Bank by opalu: 6:35am On May 03
Ok
Re: The Curious Case Of First Bank by ezenna191(m): 6:39am On May 03
Corruption has eaten every sphere of Nigeria's socio-economic and political life. While congratulating the CBN for taking this bold step, it should go further and involve the EFCC for the needful.

2 Likes

Re: The Curious Case Of First Bank by bluefilm: 6:45am On May 03
The title of this thread makes me to remember one useless movie like that I just couldn't watch to the end no matter how many times I tried, called The Curious Case of Benjamin Button.

10 Likes

Re: The Curious Case Of First Bank by funmike83(f): 6:52am On May 03
Hmm, not a
Re: The Curious Case Of First Bank by DWJOBScom(m): 7:02am On May 03
It's a case of when your debtor owns you and you cant do anything about it

1 Like 1 Share

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