THINGS appear not be going so well for First Bank of Nigeria (FBN) as the financial institution has cancelled an extraordinary general meeting (EGM) earlier scheduled for the consideration of a N300 billion capital raise.
This is as the bank’s Managing Director, Dr Adesola Adeduntan, steps down amid speculations that he was forced to leave the financial institution. A new sheriff, Mr Olusegun Alebiosu, will take over from Dr Adeduntan in April, 2024.
A big sign that things are not right with First Bank is that it is the only financial institution among the elite FUGAZ that is yet to release its full-year 2023 financial statement. FUGAZ is an acronym for First Bank of Nigeria (FBN), United Bank for Africa (UBA), Guaranty Trust Bank (GTB), Access Bank and Zenith Bank.
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Cancellation of EGM
First Bank cancelled its EGM scheduled to take place on April 23, 2024, to deliberate on the possible capital raising of N300 billion to shore up its assets.
Banks are hurrying to raise capital to fulfill the Central Bank of Nigeria (CBN)’s new requirements. The CBN had, on March 29, announced new minimum capital requirements of N500 billion for international banks and N200 billion for commercial banks with national authorization.
Regional and merchant banks are to raise their capital to N50 billion, while non-interest banks are to raise N20 billion (for national institutions) and N10 billion (for regional institutions).
“All banks are required to meet the minimum capital requirement within a period of 24 months commencing from April 1, 2024 and terminating on March 31, 20” CBN said, in a circular signed by Director of Financial Policy and Regulation, Mr Haruna B. Mustapha.
Other banks have initiated capital-raising efforts. Access Holdings Plc has disclosed plans to establish a capital raising programme of up to $1.5 billion and another N360 billion from a public offer. Zenith Bank is also seeking shareholders’ approval to raise capital. GTB is eyeing $750 million through a capital raise. UBA is also raising fresh capital through sale of 10.8 billion ordinary shares.
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However, First Bank is yet to unveil any programme or plan for the capital raise and aborted a plan in that direction through the April 19 letter.
Financial statements still not released
The bank is also yet to release its financial statement. It is the only bank in FUGAZ class that is yet to release its annual report for 2023 financial year. As April 2024 gradually comes to an end, some shareholders say they are worried that First Bank is not yet releasing any information in this regard, which is getting investors worried.
A shareholder of First Bank, who pleaded anonymity, said: “I am worried that we are not being told anything regarding the annual report. With the sudden change of leadership in the bank, I am no more comfortable as I am sure something is happening behind the scene.”
Another shareholder, who simply identified himself as Sunday, said he hoped the bank would release its financials and dividend to boost the confidence of investors.
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“I just hope this is not a case of poor corporate governance. The bank needs to release its financial statement as fast as it can to show the world that no fraud or any illegal thing has taken place,” he noted.
New leadership
With Adeduntan out, First Bank, on April 22, announced the appointment of Alebiosu as its acting managing director with immediate effect.
Adesola Adeduntan
The bank said, “Following the resignation of the managing director/CEO of FirstBank, Dr. Adesola Adeduntan, the Board of Directors has appointed Olusegun Alebiosu as the acting CEO of the 130-year-old institution.
“The appointment takes effect immediately and is subject to the approval of the Central Bank of Nigeria.”
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