CBN Queries First Bank For Appointing New MD ‘Without Approval’

The Central Bank of Nigeria has queried the Board of the First
Bank of Nigeria Plc for removing Dr Adesola Adeduntan, the Managing
Director/Chief Executive Officer, without regulatory approval.

The query is contained in a letter dated April 28, 2021 signed
by the CBN Director, Banking Supervision, Mr Haruna Mustafa, and
obtained by the News Agency of Nigeria.

The letter was addressed to the bank’s Chairman, Mrs Ibukun
Awosika.

Mustafa said that the action was taken without due consultations
with the regulatory authorities, especially given the systemic
importance of the commercial bank.

He noted that the tenure of Adeduntan has yet to expire.

“The CBN was not made aware of any report from the board
indicting the managing director of any wrongdoing or misconduct;
there appears to be no apparent justification for the precipitate
removal.

“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 expiration of his second
tenure which is due on Dec. 31, 2021,” he added.

Mustafa noted that the removal of a sitting MD/CEO of a
systemically important bank was not good.

“The removal of a sitting MD/CEO of a systemically important
bank that has been under regulatory forbearance for five to six
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.

“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.

“In the meantime, you are directed to desist forthwith from
making any further public/media comments on the matter. Your
comprehensive response on the foregoing should reach the Director,
Banking Supervision Department, on or before 5p.m. on April 29,
2021,” he said.

NAN reports that First Bank on Wednesday announced the
appointment of Mr Gbenga Shobo as the new Managing Director and
Chief Executive Director.

Awosika said that the appointment was subject to all regulatory
approvals.

She said that Shobo succeeds Adeduntan who would be leaving the
bank in accordance with the bank’s term limit for its chief
executive after successfully leading the bank since January
2016.

These decisions will take effect from today, April 28, 2021,”
Awosika said.

“We are proud to announce Gbenga Shobo as our new Managing
Director/Chief Executive Officer.

“His appointment has proven our resilience of our succession
planning mechanisms and the value we place on our long-standing
corporate governance practices, which underpin the institution’s
enduring sustainability and 127-year legacy.

“Shobo has had a successful career in the bank and elsewhere
culminating in his appointment as the deputy managing director in
2016 prior to his appointment as the managing director.

“The board is confident that Shobo has the experience and the
understanding of the bank and the know-how to lead the bank through
this next phase of growth, which is focused on positioning First
Bank as the preeminent bank in our chosen market, delivering value
to our stakeholders,” she added.

Awosika said that the bank also appointed Mr Abdullahi Ibrahim
as the Deputy Managing Director.

According to her, Mr Ini Ebong, Mr Segun Alebiosu, Mr Seyi
Oyefeso and Mrs Bashirat Odunewu were also appointed as executive
directors.

She noted that these decisions were subject to all regulatory
approvals. NAN

The Central Bank of Nigeria has queried the Board of the First
Bank of Nigeria Plc for removing Dr Adesola Adeduntan, the Managing
Director/Chief Executive Officer, without regulatory approval.

The query is contained in a letter dated April 28, 2021 signed
by the CBN Director, Banking Supervision, Mr Haruna Mustafa, and
obtained by the News Agency of Nigeria.

The letter was addressed to the bank’s Chairman, Mrs Ibukun
Awosika.

Mustafa said that the action was taken without due consultations
with the regulatory authorities, especially given the systemic
importance of the commercial bank.

He noted that the tenure of Adeduntan has yet to expire.

“The CBN was not made aware of any report from the board
indicting the managing director of any wrongdoing or misconduct;
there appears to be no apparent justification for the precipitate
removal.

“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 expiration of his second
tenure which is due on Dec. 31, 2021,” he added.

Mustafa noted that the removal of a sitting MD/CEO of a
systemically important bank was not good.

“The removal of a sitting MD/CEO of a systemically important
bank that has been under regulatory forbearance for five to six
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.

“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.

“In the meantime, you are directed to desist forthwith from
making any further public/media comments on the matter. Your
comprehensive response on the foregoing should reach the Director,
Banking Supervision Department, on or before 5p.m. on April 29,
2021,” he said.

NAN reports that First Bank on Wednesday announced the
appointment of Mr Gbenga Shobo as the new Managing Director and
Chief Executive Director.

Awosika said that the appointment was subject to all regulatory
approvals.

She said that Shobo succeeds Adeduntan who would be leaving the
bank in accordance with the bank’s term limit for its chief
executive after successfully leading the bank since January
2016.

These decisions will take effect from today, April 28, 2021,”
Awosika said.

“We are proud to announce Gbenga Shobo as our new Managing
Director/Chief Executive Officer.

“His appointment has proven our resilience of our succession
planning mechanisms and the value we place on our long-standing
corporate governance practices, which underpin the institution’s
enduring sustainability and 127-year legacy.

“Shobo has had a successful career in the bank and elsewhere
culminating in his appointment as the deputy managing director in
2016 prior to his appointment as the managing director.

“The board is confident that Shobo has the experience and the
understanding of the bank and the know-how to lead the bank through
this next phase of growth, which is focused on positioning First
Bank as the preeminent bank in our chosen market, delivering value
to our stakeholders,” she added.

Awosika said that the bank also appointed Mr Abdullahi Ibrahim
as the Deputy Managing Director.

According to her, Mr Ini Ebong, Mr Segun Alebiosu, Mr Seyi
Oyefeso and Mrs Bashirat Odunewu were also appointed as executive
directors.

She noted that these decisions were subject to all regulatory
approvals. NAN