The Central Bank of Nigeria (CBN) has issued the Board of First Bank Ltd, one of Nigeria’s oldest banks a query for the removal of its CEO.
On Wednesday the Board of Directors of First Bank of Nigeria Limited revealed it had appointed Gbenga Shobo as its Managing Director/Chief Executive Officer (CEO). The appointment was disclosed in a statement made by the bank’s Chairman, Ibukun Awosika.
Gbenga Shobo, The New Managing Director of First Bank
However, in an apparent leak, a letter from the central bank to First Bank revealed a query from the former to the latter expressing concern that the appointment of Shobo was done without the approval of the apex bank.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to media reports that the Board of Directors has approved the removal of the current Managing Director of the bank, Dr. Sola Adeduntan, and appointed a successor to replace him. The CBN notes with concern that the action was taken without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.”
The CBN also claimed that the tenure of Mr. Adedutan was yet to expire (bank MD’s have a maximum 10 years) and that they were also not aware of any misconduct of the former MD and as such there was no justification for his removal.
Former MD/CEO of Firstbank, Dr. Adeduntan
“Given that the tenure of Dr. Adeduntan is yet to expire and the CBN was not made aware of any report from the Board indicting the Managing Director of any wrong-doing or misconduct, there appears to be no apparent justification for the precipitate removal.”
However, Gistflash gathered that First Bank has a maximum of 6 years tenure for its MDs in line with its succession plans. They also claimed the CBN is meddling in its internal affairs as the removal of the MD is in line with its succession plans and also does not exceed CBNs maximum of 10 years.
“First Bank followed its corporate governance framework in its change of leadership and appointment of new executive directors. No Managing Director in the 127 years history of FirstBank has ever attempted a tenure extension. Why now?”
Another source who did not want to be mentioned as they were not authorized to do so lamented that “Adeduntan’s term formally ends in June this year after 2 terms of 3 years each. Leaving early is in line with the bank’s succession planning. When he was appointed 6 years ago and a DMD role was created, the erstwhile FirstBank Managing Director knew the DMD would succeed him and this is what has happened. This is corporate governance at its best.”
However, the apex bank in the leaked letter also suggested that it had provided First Bank with “regulatory forbearance” which can be interpreted as a bailout subliminally indicating that it has a say in the operations of the bank.
“We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank which has enhanced its asset quality, capital adequacy and liquidity ratios amongst other prudential indicators. It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiry of his second tenure which is due on December 31, 2021. The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for 5 to 6 years without prior consultation and justifiable basis has dire implications for the bank and also portends significant risks to the stability of the financial system.”
Sources within the bank also allude without proof that the involvement of the central bank in this matter may also be due to First Bank’s support of Flutterwave which may have angered CBN.
“Is this payback for FirstBank for supporting and enabling Flutterwave and other tech companies? FirstBank MD-Designate, Gbenga Shobo created a revolution by partnering with Flutterwave and other tech companies. Is this payback? The CBN Governor must be called to order. This is not a banana economy. We need to preserve the FirstBank heritage with its seamless succession planning.”
It is unclear how this matter will end but stemming from experience, we will not be surprised if this matter ends in court in a few days. The Central Bank has often controversially delved into board-related issues such as appointments and even firing of all or some Board members for what it perceives as severe infractions.
And as expected, it ended its query to the bank with a threat to the board if the decision to remove Adeduntan is not reversed.
“In light of the foregoing, you are required to explain why disciplinary action should not be taken against the Board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.”
NEXIM Bank urges FG to boost regional trade
June 16, 2021T
he Nigerian Export-Import Bank (NEXIM Bank) has advised the Federal Government to make effort to boost Nigeria’s trade in the ECOWAS and African continent.
Mr Abba Bello, Managing Director, NEXIM Bank, gave the advice in Abuja on Wednesday, at the ongoing Nigeria @ 60 Exhibition of Made in Nigeria Products and Cultural Display.
The News Agency of Nigeria (NAN) reports that the exhibition was organised by the Inter-Ministerial Committee on Nigeria @ 60, in collaboration with Business Visa and Trainings Co. Ltd.
According to Bello, Nigeria’s regional trade is low at less than 12 per cent and 15 per cent for ECOWAS and the African continent, respectively.
This is in spite of Nigeria’s ranking as the biggest economy in Africa with a GDP of about $477 billion and contributing over 60 per cent of ECOWAS GDP.
Bello, while speaking on “the Fundamentals of Branding and Financing Made in Nigeria Products for Export’’ highlighted key issues that must be addressed for the country to increase export and boost regional trade.
He said that Nigeria had the best chance to promote rapid industrialisation and boost manufactured exports in the regional market, where it had comparative advantage.
On developing Services Export, he noted that services contributed over 50 per cent of Nigeria’s GDP, yet the country did not have significant footprint in services export.
He said that this needed to be addressed.
“Currently, Nigeria’s Nollywood industry is ranked among the most prolific in the world.
“Empirical evidence also indicates that Nigeria can compete favourably in such areas as ICT and other professional services,’’ he said.
Bello said that Branding for Export was important to export, as it could affect product perception, which may create customer loyalty or lead to product rejection, as the case may be.
“It has been said that poor branding is one of the reasons why Nigerian products, particularly value-added products, have not performed optimally in the international market.
“An exporter should therefore see himself/herself as an ambassador, as his activities/products will not only impact his brand, but could impact the bigger brand, that is, the image of our country Nigeria.
“Product Packaging and Labeling as well as availability of well-equipped testing labs are quite critical to ensuing product quality, which impact on the exporter and Nigeria’s brand.
“Equally important is the activities of regulatory agencies like the Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), and the Nigerian Agricultural Quarantine Services,’’ he said.
According to Bello, the dearth of quality labs/ quality packaging provides investment opportunities for entrepreneurs, while helping to promote export.
He said that Nigeria’s export, currently dominated by raw/semi-processed, mainly agricultural commodities, usually attracts low export prices.
“There is a need to increasingly add value to our products to boost export revenues and create more jobs,’’ Bello said.
He said it was instructive to enhance credit flow to the non-oil export sector, especially with regard to supporting capital investments in productive assets.
This, according to him, is necessary toward realisation of the key objectives of economic diversification.
MTNN lifts trading on NGX by 0.15%
June 16, 2021
Trading activities on the Nigerian Exchange rebounded on Wednesday with a gain of 0.15 per cent due to interest in MTN Nigeria Communications (MTNN).
Specifically, the All-Share Index increased by 57.41points or 0.15 per cent to close at 38,564.70 from 38,507.29 achieved on Tuesday.
Consequently, the month-to-date return increased to 0.3 per cent, while the year-to-date loss moderated to 4.2 per cent.
Similarly, the market capitalisation rose by N30 billion or 0.15 per cent to close at N20.099 trillion against N20.069 trillion posted on Tuesday.
The market upturn was driven by price appreciation in large and medium capitalised stocks amongst which are: Seplat, MTNN, Africa Prudential, Unilever and United Bank for Africa.
As measured by market breadth, market sentiment turned positive with 27 gainers against 21 losers.
Cornerstone Insurance dominated the gainers’ chart in percentage terms with 10 per cent to close at 55k per share.
Morison Industries followed with 9.68 per cent to close at N1.36 and Learn Africa rose by 6.52 per cent to close at 98k per share.
Africa Prudential appreciated by 5.79 per cent to close at N6.40, while Courteville Business Solutions garnered five per cent to close at 21k per share.
On the other hand, Abbey Mortgage Bank led the laggards’ chart in percentage terms with 9.52 per cent to close at 95k per share.
Consolidated Hallmark Insurance trailed with 9.46 per cent to close at 67k, while CWG shed 7.26 per cent to close at N1.15 per share.
Wapic Insurance dropped 7.02 per cent to close at 53k, while Regency Alliance Insurance depreciated by 6.25 per cent to close at 45k per share.
Also, the total volume of shares traded increased by 1.81 per cent to 302.72 million shares valued at N2.81 billion exchanged in 4,387 deals.
This was in contrast with 297.35 million shares worth N3.65 billion transacted in 4,402 deals on Tuesday.
Transactions in the shares of Sterling Bank topped the activity chart with 37.47 million shares valued at N57.83 million.
Ecobank Transnational Incorporated followed with 27.39 million shares worth N142.47 million, while Wema Bank traded 27.15 million shares valued at N15.002 million.
Guaranty Trust Bank sold 26.49 million shares worth N745.34 million, while Japaul Gold and Ventures transacted 22.14 million shares valued at N11.04 million.
NGX market indices up 0.10% in bullish trading
June 10, 2021
The bullish run in the local bourse persisted on Thursday with the key market indicators increasing further by 0.10 per cent.
Consequently, the All-Share Index advanced by 39.15 points or 0.10 per cent to close at 39,210.10 from 39,170.95 recorded on Wednesday.
Accordingly, month-to-date gain increased to 2.0 per cent, while year-to-date loss moderated to 2.6 per cent.
The market capitalisation gained N21 billion to close at N20.437 trillion, in contrast with N20.416 trillion on Wednesday.
The market upturn was driven by price appreciation in large and medium capitalised stocks, amongst which are Unilever Nigeria, PZ Cussons, Vitafoam, Dangote Sugar Refinery and May and Baker.
The market breadth closed positive with 19 gainers against 15 laggards.
Linkage Assurance recorded the highest price to lead the gainers’ chart in percentage terms with 9.09 per cent to close at 60k per share.
PZ Cussons followed with 7.46 per cent to close at N6 per share.
May and Baker and Chams rose by five per cent each to close at N4.20 and 21k per share, respectively.
Unilever gained 4.96 per cent to close at N12.70 per share.
On the other hand, Computer Warehouse Group led the losers’ chart in percentage terms by 9.60 per cent to close at N1.13 per share.
Consolidated Hallmark Insurance followed with 8.97 per cent to close at 71k, while Associated Bus Company lost 7.50 per cent to close at 37k per share.
Wapic Insurance dipped 6.78 per cent to close at 55k, while Mutual Benefit Assurance shed 6.52 per cent each to close at 43k per share.
However, the total volume of trades decreased by 12.8 per cent to 158.37 million shares valued at N2.24 billion exchanged in 3,330 deals.
It was against a turnover of 181.53 million shares worth N3.96 billion achieved in 3,217 deals on Wednesday.
Transactions in the shares of Zenith Bank topped the activity chart with 27.32 million shares valued at N629.22 million.
Sterling Bank followed with 22.02 million shares worth N35.09 million, while United Bank for Africa traded 21.69 million shares valued at N154.24 million.
Transcorp sold 9.15 million shares worth N8.15 million, while Chams transacted 8.32 million shares worth N1.68 million.
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