The battle for the control of Nigeria’s oldest lender, First Bank of Nigeria Limited, among two power blocs dominated by key shareholders with interests in its ownership, was at the heart of the recent shake-up of the bank’s board, PREMIUM TIMES has learnt.
One of the blocks is led by Nigeria’s second richest man, Mike Adenuga, insiders said.
On April 29, the CBN dismissed the boards of the bank and its holding company, FBN Holdings, in a dramatic move that came a day after the bank appointed a new managing director. The regulator reinstated the former MD of the bank, Adesola Adeduntan.
The regulator said First Bank, which has over 31 million customers with a deposit base of N4.2 trillion, shareholders’ funds of N618 billion, has for years been plagued by “bad credit decisions, significant and non-performing insider loans and poor corporate governance practices”.
PREMIUM TIMES has learnt that a key reason for the crisis is the tussle for control of the bank between a block led by Oba Otudeko, who until a fortnight ago was the chairman of FBN Holdings’ board, and Mr Adenuga, who recently emerged as one of the biggest shareholders in the bank.
While Mr Otudeko had Ibukun Awosika, removed alongside him as chair of First Bank board, as his candidate,  Mr Adeduntan, the reinstated chief executive, represented the interest of Arisekola Alao, a late Ibadan business mogul and prominent shareholder, on the board, according to people with knowledge of the matter.
Mr Adeduntan, 51, is viewed by the Otudeko block as now serving the interest of Mr Adenuga, who took over Mr Alao’s significant shares after the latter’s death in 2014.
He was appointed First Bank’s managing director in 2016 to help the lender regain a sound financial footing after an avalanche of bad loans threatened to sweep it under.
First Bank’s bad loan charges had ballooned by almost four times from N25.942 billion to N119.322 billion between 2014 and 2015. That figure would soar further in the next twelve months, although at a slower pace this time, by 90 per cent to N226.037 billion, taking its delinquent loan to 24 per cent of its entire credit portfolio, well above the 5 per cent permitted by the central bank.