FBN Holdings Plc Ensured Stability, Addressed Corporate Governance Gaps Says S&P

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UK Eke (Managing Director) as Directors of FBN Holdings Plc
UK Eke, MFR Group Managing Director, FBN Holdings Plc.

FBN Holdings Plc, a well-diversified and one of the largest financial services organisations in Africa. It is structured along Commercial Banking, Merchant Banking, Capital Markets, Trusteeship, and Insurance brokerage.

FBN Holdings Plc drives the Group coordination, collaboration, and synergies across the business groups to deliver innovative financial solutions.a financial holding company and its subsidiaries are engaged in the provision of commercial banking services, investment banking services, insurance business, merchant and other financial services.

S&P Global Ratings, an American credit rating agency said changes to the boards of First Bank of Nigeria Limited and FBN Holdings (FBNH) Plc, recently directed by Central Bank of Nigeria (CBN), addressed the banking group’s corporate governance challenges and ensures the Nigerian banking sector’s financial stability.

In a statement, it stated that its ratings on FBN Group and other Nigerian banks remain constrained by shortcomings in corporate governance and transparency, among other factors.

According to CBN Governor, “FBN Group is one of Nigeria’s systemically important banks given its historical significance, balance sheet size, large customer base and high level of interconnectedness with other financial service providers.”

Emefiele also reassured First Bank of Nigeria depositors, creditors and other stakeholders of the bank of its commitment to ensure the stability of the financial system insisting that it acted to protect 31 million customers, minority shareholders of First Bank of Nigeria Ltd.

The CBN recently replaced the entire boards of FBN and FBN Holdings, and reinstated the former executive directors. The CBN appointed the following people as directors of the holding company, FBNH, Dr. Fatade Abiodun Oluwole, Kofo Dosekun, Remi Lasaki, Dr Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam, Sir Peter Aliogo, and UK Eke (Managing Director) as Directors of FBN Holdings Plc. Remi Babalola was appointed as Chairman.

For First Bank Ltd, Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo were appointed directors while Tunde Hassan-Odukale was appointed Chairman.

The CBN had also requested FBN Group unwind certain exposures and divest from its participation in a non-permissible company, also pointing to potential corporate governance lapses at the bank.

FirstBank Firstmonie

“However, Dr. Adeduntan’s reinstatement and the re-appointment of the other executive directors underscores the CBN’s confidence in the existing management team to continue the turnaround of the third-largest banking group in Nigeria, which has total assets of Nigerian N7.7 trillion.

“We are of the view that the CBN’s historical approach has been more reactive than proactive, as illustrated by the Skye Bank episode. That said, recent actions, while disruptive in the near-term, may signal a more direct and possibly decisive supervisory approach to alleged failings in the management and governance of regulated institutions,” it stated.

It, noted that FBN’s overall credit profile has gradually stabilised since 2016, with a capital adequacy ratio of 17 percent in 2020, as against a 15 percent minimum requirement.

Similarly, the bank’s asset quality indicators improved significantly, with Non-Performing Loans (NPLs) reducing to 7.7 percent in 2020, from 20-25 percent since 2016.

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