The current ugly scenario playing out in the recuperating First Bank Nigeria Holdings, FBNH, is definitely springing surprises among the watchers of the ongoing battle involving some single largest shareholders scrambling for the ownership control and influence; this has,no doubt, become worrisome , and the fear over it is its tendency of worsening its fate and endangering the little recovery gained in the 2023 and 2024 financial years.
Though its PR handlers are celebrating the bank’s management change and are hopeful of its turnaround, FBNH remains a refurbished financial elephant with weak profit engine that cannot afford another round squabbles.
The Return of the “Evil Days” ?
The fear of some of its stakeholders, particularly the stock investors is palpable : are the current signals on the horizon different from the evil years driven by power tussles and weak corporate governance that lasted almost a decade ? For them ,it is once bitten twice shy as the ugly memories of the past re-echo .
When those evil years lasted , the oldest bank Nigeria, was in tempestuous mode ; the bank was turned upside down due to some issues bordering on leadership crisis worsened by weak management ,outright and alleged humongous fraud cases.
The negative impacts of the above key issues were something worrisome . For instance, the year 2016 saw its non-performing loans spike and its share price fell to as low as N3 per share.FBNH had recorded a total loan impairment of over N565 billion between 2016 and 2020, with N376.4 billion, accounting for more than half the total loans impaired, provided for in 2016 and 2017 alone. Insider-related loans in First Bank were problematic and were responsible for the spike in bad loans.
The banking hall was also not spared of scandals. Under Adesola Adeduntan,the former MD , the bank , over alleged negligence , lost about N60 billion to electronic frauds . The bank recently sacked, at least ,120 employees after discovering a ₦40bn fraud. Those ugly circumstances led to the bank’s impaired strategic position along the line and its loss of its industry leadership to some younger banks.
FBNH has continueed to struggle with this badly damaged strategic position, believed by some analysts, to be driven by its deficient human and intellectual resources despite the fact that its physical and financial resources are highly competitive . For instance, in the third quarter 2024 , its current total assets at N27 trillion which comprise both the infrastructure on one hand and the operational and liquid assets on the other hand are well funded by its capital resources as they covered its infrastructure just at its available free capital adequately support the bank’s operations and cushion the liabilities.
Sequel to the above belief about its financial resources, some analysts claimed that the key threat to its competitiveness could be traced to its human resources management . This is, no doubt ,so ,since people are the heart of strategy and are imperative for deploying those resources to generate competencies, and consequently to deliver the necessary competitive advantage to outperform competition. Moreover, with macroeconomic environment becoming more hostile and the industry or internal environment become more competitive, only a competent leadership could give a desired corporate direction to FBNH.
Specifically, while its organizational culture is believed by some analysts to be outdated and the negative impacts of the aggressive expectations and influence of some stakeholders that led to unethical power struggles and weak corporate governance , the resultant poor strategic capability has made it difficult for the management to effectively exploit opportunities and minimize the prevailing threats in the operating environment. This has remained the challenges before the new leadership of FBNH currently.
Otedola VS The Stakeholders Expectations
It was to avert the another round of the nasty scenario of the past and to reclaim its lost industry leadership laurel which was due to the above circumstances that Otedola was elected its group board chairman early 2024. He is expected to achieve this by creating the necessary synergies between the board and the management , tapping into his experience and skills the bases of which he was elected .
Otedola’s pedigree and anticiddents confirmed this belief as much . Although , there were mixed feelings surrounding his election ,however , both admirers and critics have their beliefs and defences for his choice and opposition. For his admirers , Otedola , the energy maven,is believed to be a disruptive innovator and an unorthodox businessman , a T shaped person with a depth in one area as well as breadth in lots ; he is a mega mind that set for himself laudable goals such as “putting a ding in the universe” .His capability for associating ,questioning, observing, networking and experimenting is what makes him unique .Of course , those are the habits of mind that characterize disruptive innovators.
They believe he excels at connecting seemingly unconnected things ; aided by his broadening experience ; he is known for constantly asking why things aren’t done differently , a taste that linked to a talent for observation ; he is a great networker and also an inveterate experimenter.
For those that opposed his election, Otedola is an opportunist and a schemer ; he is allegedly sneaky , belligerent, contentious, aggressive, truculent, combative or pugnacious ; he is a no nonsense man .
In the last few years , those who underrated him had their fingers burnt .Farouk Lawan was jailed for receiving a bribe from him . Moreover, the serial billionaire investor, Femi Otedola, at another point in time drew levelled allegations of backstabbing against his erstwhile business partner and Chairman of Transcorp Plc, Mr. Tony Elumelu ;the squabbles for the control of Transnational Corporation Plc between two billionaire friends hit a boiling point with Otedola accusing Elumelu of a series of betrayal.
Also , the face-off between him and Jim Ovia, chairman of Zenith Bank, over an alleged multibillion naira fraud is another that characterizes his genetically stuff as a resilient fighter . But some observers believed this is one of the traits needed for anyone to lead FBNH aright .”The issue is that when you are dealing you must be careful not to underrate his intelligence and shrewdness. His values and rights are sacrosanct.”, says an insider .
No doubt, Otedola’s unique pedigrees as seen by his admirers and critics are currently playing out as the chairman,Board of Directors of FBNH . While his admirers believe he currently living up to the stakeholders expectations ,cleaning up the mess on ground , his critics believe , he is merely witch-hunting and battling to pocket the bank for his selfish desires .
However, one thing that no one could dispute not is that the bank is largely unsettled and yet to reclaim its lost industry leadershp ambition its stakeholders expected .This is as the battle line is more conspicuously drawn between him as the current Chairman , Board of Directors and Femi Otudeko, a former Chairman of the same board.
Moreover, insiders are now trapped in a web of splintering camps and splitting loyalties as Otedola engaged his arch rival for a battle over who possess the largest shares among the top shareholders of the bank . More painful is the fact that as the power tussles escalate , the bank’s recovery is still remains fragile. These are still not the expectations of its stakeholders.
The Crux of the Matter: Power Tussles.
The crisis in the Bank is festering as the standoff continues. The question whose answer could not be affirmed yet is : who holds the single largest share of the institution between the duo of Otedola and Otudeko ? From the available reports , First Bank Holdings, in its audited accounts for 2023, had put Otedola as the single largest shareholder with a 9.41 per cent stake in the financial institution. That was not a special deal.
However , what sparked confusion is that FBN Holdings in its December 2023 audited accounts released in May indicated the Barbican’s shareholding in the bank was slashed to 3.1 billion (3,110,400,619) or 8.67 percent of the lender’s total shares from the earlier reported 4.8 billion (4,886,062,743) shares or 13.61 percent in its December 2023 unaudited accounts published in February. A note attached to the audited accounts strangely said the 3.1 billion shares represent the total that had been “verified” by the Central Bank of Nigeria
But data from the Central Securities Clearing System (CSCS), the widely accepted source for confirming share ownership, has Barbican Capital, which is affiliated with the Oba Otudeko-owned Honeywell Group, as the largest single shareholder with a 15.01 per cent stake. Records kept by the bank’s registrars, Meristem Registrars & Probate Services Ltd, also showed that Barbican Capital is the single largest shareholder with 5,386,397,202 shares (5.38 billion) shares as of May 23, 2024 . According to Barbican’s CSCS statement as of May 23, 2024, the company owned 5,386,397,202 shares (15.01%) while It held 4.8 billion (4,886,062,743) shares or 13.61 percent as at December 2023.
However, if the report by the Central Bank of Nigeria,CBN , in response or counter suit to the.Barbican Capital‘s 5.4bn Shareholding validation suit both CBN and FBN Holdings had asked the Court to dismiss the suit because Barbiician Capital failed to support its claim with evidence over the sharer acquired by it . Consequently, the CBN vide a letter dated 29th of January 2024, informed the FBN who is the defendant that it was only able to verify only 3,110,400.619 units of shares out of the plaintiff’s then 4,770,269,843 billion shareholdings due to insufficient documents.
The bank is putting the blame on the Otudeko doorstep. “Rather than regularise its status with the CBN by providing relevant documents to the CBN necessary for the verification of its unverified shareholding, the plaintiff has instituted this suit in a bid to activate machinery of justice to compel the defendant to defy its regulator, due process, regulatory laws and policies by mandating it to recognise all of the plaintiff’s purported shareholding obtained without CBN’s approval which as at the time of filing the suit stood to the tune of about 5,397,409,262 billion units,” the defendant added.
.The fear of other stakeholders over the struggle for the bank’s leadership and control by the duo is palpable: the tendency for any of the two to pocket the management and compromise its corporate governance , the bedrock of all modern corporations .
Its stakeholders understand how well a company survives lies in the quality of its board of directors and their understanding and preparedness to pursue a defined corporate purpose. Where the goal of such a company is unclear, the company sees itself drifting into crisis. Even where clarity of purpose exists, a weakness of executive commitment to implementing set objectives inevitably bludgeons the company into despair and possibly disaster
The controversies surrounding the ownership of its controlling stake and the dismissal of over a hundred staff that are now brewing a litany of court cases pending determination have continued to raise concerns for investors holding the bank’s shares as well as the depositors.
Weak Management
Beyond the political instability rocking the boat of the bank’s operations highlighted above, Otedola is also expected to address the issue of its weak strategic capability to ensure the bank is turned around with better profit engine .In other words, to avert the enormous negative impacts of its weak management that stymied the potentials of the bank in the last few decades.
FBNH is in dire need of a stonger strategic position,choices and actions to reclaim its industry leadership . No doubt about it, FBNH strategic position has been largely impaired both by the power tussles and weak management. Both its strat- egic potentials and ambitions , what it can do and what it actually seeks to do, which are functions of different operating environments ,strategic resources and capabilities ,the purposes its stakeholders seek as well as its history and culture have unleashed overwhelming impacts on its strategic choices. Although the Nigeria banking environments,both external and internal are undoubtedly rich in oppor- tunities , they are now than ever becoming more hostile with macroeconomic indices ,policy somersault and competitive pressures putting the players on tight corners and imposing threats and constraints . For FBNH ,however, its strategic resources and capabilities that are expected to enable its strategies have been greatly constrained by its management inability to deploy its resources to generate core competencies that could deliver competitive advantage and the purposes its stakeholders seek and consequently to outperform competition . Most importantly , the power tussles among its few single largest shareholders that resulted in weak corporate governance as well as the negative impacts of what some analysts believed are outdated organization history and culture or the taken-for-granted and hard-to-change ways of doing its businesses are its greatest handicaps.
The bank’s poor leadership strategic choices, or options, potentially available to it in responding to the above positioning issues have , however , made it difficult to positively alter its strategic position relative to its competitors . First, its business strategies fail to deliver any competitive advantage either in terms of cost or differentiation . Also, though its corporate portfolios remain broad and diverse,however , how its resources are allocated efficiently across its multiple activities, how value is added to the constituent businesses of the organisation as a whole , how the businesses are created and how innovative are more critical to success than merely enlarging its scope . Unfortunately, its past management leadership displayed failure in the above regards and this is evidently clear in the profiles of some of them.
From the aspirational but shadowy administration of Bernard Longe to the conservative and minimalist management of Moyo Ajekigbe to the aggressive and wildly transactional tenor of Bisi Onasanya to the ‘paint and repair’ era of Adesola Adeduntan, the bank has swung from one transition to another with different outcomes. Since the mid-1990s, the bank has had to cope with CIR, CAR and NPL difficulties; the elephant had inelegantly dropped to its knees barring a few intermediate years of the Ajekigbe era.
The anove ugly scenario may may not be farfetched. How the strategies come about or its processess , organization configuration, resourcing key strategic areas and managing changes are critical to success of its strategic choices .
Moreover, the success of the strategic choices adopted or chosen strategies by the bank depends on the leadership experience, the intellectual and idea lenses through which they are determined and put into action to deliver the bank’s strategic purposes .
However , in an unsettled environment managerial atmosphere in which the leadership of FBNH did its businesses in the few years which lacked effective coordination between the board and the management could not guarantee sound strategic actions.
In other words ,the critical factors that could hinder its strategic purposes are the power tussles , aggressive and selfish inclinations of leaders to manipulate the strategic processes;organisation configuration , the changes in the organisation and the manner the key resource areas are resourced to their own advantage without allowing the corporate governance to dictate the activities of the bank .
Consequently, the chairman may do everything possible to influence the appointment of the chief executive who might be unfit for the job . And where this is not possible, power plays continue to dictate the fate of such a company.
This was the situation with FBNH in the last one decade the consequences of which were ernomous and fatal . No doubt, FBNH lost its industry leadership to some younger banks in the process long. Not because it coud not do what were necessary but because it could not compete for the future in a fast changing environment ; up till now , it is yet to recover it .;the bank is now much at the mercy of environmental upheaval because it had failed to reengineer its genetic coding radically .
That the bank is yet to reclaim its industry leadership laurel is not in doubt . Its nine months results in 2024 confirm the above view. Although there have been few improvements which the bank is now celebrating, but the reality is different from what is being painted . When you benchmark FBNH with the like of Guaranty Trust Bank, particularly based on its profit or resourcefulness using its financial resources or total assets , gross earnings and profitability ,it become clearer that FBNH profit engine is not inspiring .
For instance, with a total assets of N27.5 trillion and gross earnings of N2.25tr, FBNH delivered N534b as its profit after tax, nine months 2024 while GTCO with a total assets of N15.6trn generated N1.798tr as its gross earnings and delivered a profit after tax of N1.085tr in the same period. This translates to converting every N100 generated at the top line to NN60 at the bottom line while FBNH converted its N100 at the top line to a miserable N23 at the bottom line.
It is not only its post profit margin that exposes the emptiness of the current celebration in FBNH, even its stock price that rose to N43 per share early last year before crashing to N23 in August the same year , was a mere output of the struggle to gain the control of its ownership by few individuals not a product of its fundamentals.
The core fear over the oldest bank is that without resolving the bank’s top single shareholders crisis , the bank could not regain its competitiveness in the industry as its performance is believed to remain less inspiring .
For some analysts the belief is that ,,it would be uneasy to regain its industry leadership under current atmosphere ,if the current trend is not nip in bud by the new leadership led by Otedola as its board chairman and Alebiosu as its chief executive This pessimism is further confirmed by the allegation that the bank’s chief executive officer and other core officers might be manipulated since their appointments were allegedly based on their connections to top and influential shareholders .
Can Otedola Turnaround this Financial Supermarket?
The question is whether both the board led by Otedola and the management led by Alebiosu have the wherewithal and political will to live up to the stakeholders expectations.
To reclaim its industry leadership position, the bank is a dire need of strategic leaders with foresight with wherewithal to build a new strategic architecture.
The goal of competition for industry foresight is naturally to get the best possible assumption base about the future and thereby develop the prescience needed to proactively shape the industry evolutio .It is essentially the competition to establish one’s company as the intellectual leader in terms of influence over the direction and shape of industry transformation.
It gives a company the potential to get to the future first and stake out a leadership position ; It informs corporate directio; it allows a company to control the evolution of its industry And thereby its destiny .The trick is to see the future before it arrives.
Foresight helps managers to answer three critical question:What new types of customers benefits should we seek to provide in the a decade or more time ? What new competencies we will need to build or acquire to offer those benefits to customers ? How we will need to reconfigure the customers interface over the next several years ? A point of view about the future is a point of view about benefits, competencies and customers interface.
However, not only must the future be imagined, it must be built. When those two processes are completed we call it strategic architecture. An architect must be capable of dreaming of things not yet created and also be capable of producing a blueprint for how to turn the dream to reality. He must be both a dreamer and a draft man. He must marry art with structural engineering. .
To build a strategic architecture top management must have a point of view on which new benefits or functionalities will be offered customers over the next decade or so ,on what new core competencies will be needed to create those benefits, and on the customer interface will need to change to allow customers to access those benefits mostly effectively.
But getting to the future first takes more than thoughtfully conceived strategic architecture. Strategic architecture is the map , but what about the fuel? The fuel for the journey is not the money alone, many resource rich firms have surrendered the future to poorer rivals .Ultimately, it is the emotional and intellectual energy of the employees that provides the fuel for the journey ; the CEO’s ability to mobilize every ounce of emotional and creative energy in the company is essential.
core competence to describe the capabilities that underlie leadership in a range of products or services. A key challenge in competing for the future is to preemptively build the competencies that provide gateways to tomorrow’s opportunities, as well as to find novel applications of current core competencies. Any company that wants to capture a disproportionate share of profits from tomorrow’s markets must build the competencies that will make a disproportionate contribution to future customer value. A strategic architecture may point the way to the future, but it’s an ambitious and compelling strategic intent that provides the emotional and intellectual energy for the journey. It is not cash that fuels the journey to the future, but the emotional and intellectual energy of every employee.Strategic architecture is the brain; strategic intent is the heart. Strategic intent implies a significant stretch for the organization. To demonstrate that it is possible to do more with less. That is the essence of resource leverage. Stretch and leverage are blood relations.
This is importantly so because to become an industry leader or sustain leadership is not for the dillitantes . A corporate entity must fight and win three -stage related and interdependent battle for the future. Unfortunately, it has lost in all . First , analysts believed the bank has lost the intellectual leadership, needed by an industry leader for developing industry foresight and crafting strategic architecture. At this stage, it has to conceive an alternate industry structure or a new opportunity arena with a goal to out-think and out-imagine competitors.
However , the above view is not true , then it has been overtaken in battle to foreshorten the migration paths to the future. In other words, it is not certain that it currently in control of what it takes to shape and foreshorten the migration paths between today’s markets and industry structure and tomorrow’s. At this second stage for the industry leadership ,a company with the potentials to clinch industry leadership is expected to actively shape the emergence of that future industry structure to one’s own advantage .The goal is to out-flank and outdistance competitors.
The essence of this cannot be disputed .Although companies may share the same broad vision of a future opportunity, however , at the same time, they could envision very different routes for getting there in terms of the technologies they are betting on, the standards they are hoping to create, and the configuration of the product or service features.
If the leadership of wanted to dispute any of the above views , then why has it lost the market power and position relative to its pears ?
At this stage , once the new opportunities “take off” and the new industry structure begins to form, what is left is the battle for the market power and position. .Unlike the first two stages of the require shaping migration paths and gaining the intellectual leadership that are premarket or extramarket battles, this final stage is a market-based competition. And it involves a direct product-to-product or service to service rivalry between the banks ; much of the technical uncertainty has been resolved, there is a tangible product or service to offer, the value chain has taken a definite form, and the complementary roles of buyers and suppliers are more or less clear
A detailed observation of its operations confirms this as much . Although the bank has engaged itself in re engineering its process to some extent, to create the future, it has not demonstrated the capability of “re engineering” its industry. The logic is simple: to extend leadership a company must eventually reinvent leadership, to reinvent leadership it must ultimately reinvent its industry, and to reinvent its industry it must ultimately regenerate its strategy ; surely , the top management’s primary task is reinventing the industry and regenerating strategy, not re engineering processes.
To achieve this ,FBNH must change in some fundamental way the rules of engagement in a long-standing industry, redraw this boundaries between industries ,and/or create entirely a new industry to its advantages. This is more so as the capacity to invent new industries and reinvent old ones is a prerequisite for getting to the future first and a precondition for staying out in front.
Also , FBNH is in a dire need of a leadership that could think differently competitively, organizationally and strategically to regain its industry leadership. FBNH is traditionally pro-bigness biased . Although its pro-bigness bias gives it a capacity to match the resources and global distribution of large competitors brings advantages: large companies tend to devote a disproportionate share of their resources to training and education., open the door to many of tomorrow’s mega-opportunities will require significant resources and make them are significant employers, bigness without stretch and just as bigness without stretch and leverage is obesity, smallness without stretch and leverage is impotence.
The current leadership of FBNH must acknowledge that the starting resource positions are a very poor predictor of future industry leadership. A firm can sit atop mountains of cash and command legions of talented people, and still lose its preeminent position. Likewise, a firm can sometimes overcome enormous resource handicaps and successfully scale the heights of industry leadership. In other words, getting to the future first is more a function of resourcefulness than resources.
Moreover , as opposed to its highly centralized ,overly bureaucratic control oriented , big brain ,technology led organizational archetypes of the 1960s and 70s, this bank’s new leadership must be capable of mobilizing employees at all levels around a strategic intent better , leveraging resources across organizational boundaries ,finding and exploiting white space opportunities , redeploying core competencies, consistently amazing customers , exploiting new competitive space through expeditionary marketing ,and building banner brands all require new ways of thinking about the organization .
The watchwords of the engineers of modern corporation have changed radically to devolution, empowerment ,focus ,entrepreneurship ,personally accountability and customer led and FBNH must be adapt itself to this new organizational drive.
Last but not the least , FBNH needs a new perspective on what is strategic ; it needs to extend the industry foresight and develop a supporting strategic architecture ; it needs a new perspective on what it means to be strategic ; it is not just how to maximize share and profits in today’s businesses , but what it want to be as a corporation in the future time, how it could reshape this industry to its own advantage ,what new functionalities does it want to create for customers and what new core competence it should be building .It needs a new process for strategy making ,one that is more explanatory and less ritualistic ; it needs to apply new and different resources to the task of strategy making , relying on the creativity of hundred of managers and not just on the wisdom of a few planners .
The above are the challenges confronting the bank and what Femi Otedola as FBNH Board’s chairman and Olusegun Alebiosu ,the bank’s CEO, were expected to do by the bank’s stakeholders to do to stabilize the bank and consolidate the little recovery gained under the forbearance from CBN ; they are expected to improve on it or turn the bank around .
But the opposite is the case . The bank has preoccupied itself with legal tussles over who owns what amount of shares which some observers allegedly believed to be raw witch-hunting or a mere personal vendetta . All of a sudden one allegation or the other has been leveled against Otudeko , his arch -opponent in a race of leadership supremacy .
Despite the confidence reposed in the new chairman , signals from the stock market were scary . The crises and scandals in the bank caused the company’s share price to plummet by over 50% in five months FBN Holdings, which traded at ₦43.95 per share on March 19, has seen its share price fall to ₦20.35 in August, 2024, according to data from the Nigerian Securities Exchange (NGX). The dramatic decline is largely attributed to a series of controversies that have embroiled the company’s management and operations in just few months.
For instance, a former employee of First Bank of Nigeria Limited, Adesuwa Ezenwa, suddenly accused billionaire industrialist Oba Otudeko of massive fraud during his time as chairman of FBN Holdings Plc, the parent company of the bank. Bisi Onasanya, the bank’s managing director/chief executive officer at the time, was also named in the allegations. She alleged that unsecured loans of roughly N12 billion were given to a company in which Mr Otudeko had significant investment even though the facility was masked as loans to Stallion Group of Companies.
Recently , the Economic and Financial Crimes Commission (EFCC) arraigned Oba Otudeko, Chairman of Honeywell Group,alongside a former Managing Director of First Bank Plc, Olabisi Onasanya before Chukwujekwu Aneke , Justice of the Federal High Court, Ikoyi, Lagos, over charges, totalling 13 counts, involve allegations of obtaining N12.3 billion by false pretences.
Another joker being allegedly employed by Otedola is a surreptitious move for a private placement which is seen by Otedola’s critics as his last resort. With the private placement of N360 billion, Otedola’s critics believed he could gain the absolute control and turn First Bank to a piggy bank without checks, balances and corporate governance.
However ,some outraged shareholders of First Bank, Nigeria’s oldest financial institution, moved against the shocking bid by Otedola to embark on a private placement at a time the highly successful rights issue conducted by the bank were yet to be concluded and shareholders allotted their shares.
Many of the angry shareholders believe the private placement initiative was a ploy by Otedola and some others unnamed to undertake a takeover of the bank through the back door. The aggrieved shareholders insisted that any capital raised should be done by way of rights issue to give all existing shareholders fair and equitable chance to participate.
Another major worry of the shareholders is that they accuse Otedola of running the bank as his private estate without consultation. “The bank does not belong to Otedola, and it should be managed in the over all interest of the shareholders and not according to the whims of an individual,” one of the parties said.
Among the shareholders had reportedly written to the board of the bank demanding that an emergency general meeting, EGM be held in 21 days.In their demand, they stipulated four items that should be on the agenda of an EGM. The four items are to stop the controversial private placement, vote for the removal of Femi Otedola, the bank’s chairman and Julius B. Omodayo-Owotuga as directors of the bank. Omodayo-Owotuga is Managing Director at one of Otedola’s companies and was nominated to the board by Otedola. The shareholders also want the EGM to elect Olufemi Otudeko and Saheed Alao to the board. The call for the EGM is provided for under section 215 (1) of CAMA.
The shareholders alleged that since disgraced former Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, influenced Otedola’s acquisition of significant amount of shares that led to his emergence as Chairman of FBN Holdings, the financial institution has remained unsettled.
His critics alleged the private placement was because Otedola’s calculations to complete the take over of the bank during the rights issue failed. Moreover, they callaimed this was largely because in December 2024, the CBN concluded the share verification of all the holding of Barbican Capital, the single largest shareholderer of the bank and which is linked to Oba Otudeko. According to a report , as a result of the completion of the shareholding verification by the CBN, Barbican Capital the single largest shareholder was then able to take up all the rights due it during the capital raise to further consolidate its shareholding leadership.
However , some observers are not caught unaware over the current ugly scenario with Femi Otedola ,as the Chairman ,Board of Directors . To capture FBNH leadership had been his dream . Before this warfare with Oba Otudeko, Otedola had fought Odukale relentlessly for the same mission. In fact , when the heat of the standoff between Otedola and Odukale became unbearable Mr Remi Babalola ,the man used to replace Otudeko in 2021 as the FBNH Board Chairman had to step down . On Friday, December 17, 2021, Nigeria’s financial media was shocked by the announcement of the resignation of after his fruitless efforts to cool the warring nerves of Otedola and Odukale who engaged in fight to finish over the control of the bank .
However ,though the local media freely attributed Babalola’s resignation to the battle for shareholder supremacy between Hassan-Odukale and Otedola, but this was not entirely or majorly true according to some analysts . “The former Chairman of the Holdco was reasonably comfortable managing the fragile egos of the two significant company shareholders, but much less easy was managing the personal frustration at not taking optimal operational decisions without the rib-breaking hug of a regulator”.
The battle between new notable and energy maven, Femi Otedola, and the influential and significant shareholder, Oye Hassan-Odukale, indeed, raised the stakes for power and influence at the financial lender. Otedola acquired 7.57% of FBNH shares to outpace Odukale the same year to emerge the largest singleshareholder then .
A credible board source reportedly explained that “the battle between Otedola and Hassan-Odukale, kindled fire that worried the board. However, the more serious problem was the lack of clarity over Otedola’s equity funding source. There was a growing belief that the equity play had deeper undertones with stronger institutional hands rolling the dice.”
Seeing that the underlying game was that of chess and not checkers; and that the interests involved were formidable, Babalola did the smart thing and hit the stop buzzer retiring from a game he could never win. He avoided allowing his name used as an imprint of validity.”
According to a report from the Proshare ,a reputable financial medium, in eight months, Babalola, no doubt, saw the many grey sides of corporate Nigeria he had thought existed only in the hyperactive and perhaps over-indulged imaginations of Nollywood scriptwriters.”At FBNH, fact and fantasy became indistinguishable. Babalola was either misled to have accepted the appointment or was motivated by something other than the Holdco’s legacy reality”.
Moreover , Otedola displayed another trait of his business trick that put Babalola and some other observers at their wit end .”While Babalola went through this appreciation of reality, growing doubts about why Otedola acquired 7.57% of FBNH shares gained currency when he insisted that he was not gunning for a seat at the FBNH board table but merely wanted to see good returns coming from sound management at the group.
Otedola declared , “I am simply an investor who saw an opportunity in the financial institution and decided to take advantage of it through the investment I have made. My interest, contrary to speculations, is not to become Chairman of the bank or its Holdco. Moreover, I am in semi-retirement.”
Not many stakeholders trusted him “Of course, this could have been casual modesty, but Otedola is not known to be either casual or decidedly modest; the Nigerian business gamemaster is deliberate, smart, and calculating, depending on which side of the table you are sitting on, “,one analyst reportedly declared
According to the analyst ,Otedola’s decision not to sit on FBNH’s board then was not a nod to the competence of the other people running the company in which he ‘currently’ holds the largest individual interest then . It was more a desire to keep to his chest the subtle undertones of his equity move and to shield the expected final payoff from the prying eyes of third parties.
A Holdco insider, believed the former Minister of State for Finance was irritated at the continued poor governance practices that still prevailed in the system. Babalola, according to the source, was tired of tiptoeing around decisions taken between the regulator and the bank without providing first recourse to the Holding company’s board.
Surely , the bank’s stakeholders are not comfortable with the above ugly scenario allegedly targeted at compromising the organization’s corporate governance, the bedrock of all modern corporations.
The FBN’s Board and management were expected to find a way to re imagine the bank’s service delivery proposition and redefine its competitive advantage in a highly competitive financial market space . The fundamental issues needed to be addressed while its service delivery channels and user experiences and interfaces needed some up scaling .
Moreover , the bank needs to re-strategize , crafting generic strategies like cost containment and niche dominance into supporting approaches that develop uncontested markets . FBNH and its bank FBN needed relearning too , letting go of tiresome habits and pick up new processes, procedures, and policies designed to reshape their future. To achieve this, the bank and its Holding company may require internal effort that adopts essential and straightforward measures to improve efficiency and effectiveness, including the following:The bank needs to adapt to the fast-paced competitive environment, not about size but speed and efficiency. Data optimization, data management, and data leverage are the keys.
In pursuit of governance excellence, a top-to-bottom review of the bank’s people, processes, and procedures from the perspective of tomorrow’s needs contrasts with today’s wants. It needs a deliberate acculturation process ;the bank needs to set a new culture that breaks away sufficiently from the past to establish a more professional future considering customers’ experiences and expectations. Artificial intelligence (AI) and machine learning (ML) should improve service delivery quality ranking amongst the best in the world; a mystery customer survey should regularly assess the service delivery experiences of customers.But the bank’s top single shareholders are rather engaging desperately to get upper hands and to pocket the management for what some people believed is all about selfish interests, not in the interest of the bank’s minority shareholders.
However , some individuals or stakeholders still believed Otedola has never derailed from living up to the stakeholders expectations.
To regain its in industry leadership position and get Off the treadmill both the board led by Otedola and the management led by Alebiosu must answer four critical question :what new core competencies will we need to build, what new product concepts should we pioneer, what new alliances will we need to form, what nascent development programs should we protect,and what long-term regulatory initiatives should we pursue.
No doubt , it takes substantial and sustained intellectual energy to develop high-quality, robust answers to the above critical questions .However, they must be answered ,otherwise ,FBNH will not fare better a company that succeeds at restructuring and reengineering but fails to create the markets of the future; it will remain on a treadmill, trying to keep one strong step ahead of the steadily declining margins and profit of yesterday’s businesses; a bank without any recent high-profile initiatives launched ,the track record of new business creation or ability to shape that future and regenerate success again and again in the years and decades to come ; a bank with senior management not having a clear and broadly shared understanding of how the industry may be different ten years in the future ,“headlights not shining farther out than those of competitors, without a competitively unique point of view about the future , less in setting the new rules of competition within its industry ,not regularly defining new ways of doing business, building new capabilities, and setting new standards of customer satisfaction but less a rule-maker than a rule-taker within its industry ; a bank without intent on challenging the industry status quo than protecting it or with senior management not fully alert to the dangers posed by new, unconventional rivals, with potential threats to the current business model not widely understood ; a bank with senior executives not possessing a keen sense of urgency about the need to reinvent the current business model, less on the task of regenerating core strategies but more much top management attention to the task of reengineering core processes, less at pursuing growth and new business development with as much passion than as it is pursuing operational efficiency and downsizing, with percentage of its improvement efforts less focuses on creating advantages new to the industry, and more percentage focuses on merely catching up to our competitors, with no competitors eager to benchmark it as it is to benchmark them, with its transformation agenda less offensive than defensive and more of a maintenance engineer keeping today’s business humming along, than an architect imagining tomorrow’s businesses.
