Femi Otedola, the current Chairman , Board of Directors, First Bank Nigeria Holdings, FBNH , an outstanding entrepreneur, billionaire business mogul, philanthropist and corporate raider has a knack for fighting billionaires. He has started again with Femi Otudeko ,another billionaire and the former Chairman ,Board of Directors , of the same company. For this unusual activity , he has come under severe criticism and become a subject of controversies. For his critics, he is merely an opportunist and a schemer. However, he has been lauded too for the same attitude by others who believe he is always fighting in good faith .
Despite the mixed feelings surrounding his personality, what could not be disputed is that the current ugly scenario playing out in the gradually recuperating FBNH, is definitely springing surprises among the watchers of the ongoing battle involving some single largest shareholders scrambling for its ownership control and influence; this situation has, no doubt, become worrisome .
Deep-seated ,cryptic, and tempestuous anger , no doubt, pervades the corporate atmosphere of the oldest bank in Nigeria , ready to explode again. Though few other powerful shareholders are also involved, at the centre of the ongoing storm is Femi Otedola and Obafemi Otudeko . The fear is its tendency of worsening the fate of the bank that is just coming out of doldrums .
And the raging question remains: for whom are they fighting, for their selfish interests or the entire bank shareholders? For some analysts, because Otedola is regarded as the one holding the weapons while others are merely defending themselves, the question is better directed to him..
This development was least expected from a man expected to stabilize peace in the bank and turn it around. Indeed, FBNH’s PR handlers celebrated the bank’s management change and were hopeful of its turnaround ; unfortunately, not much has been achieved by the new leadership led by Femi Otedola and Olusegun Alebiosu, the CEO of First Bank of Nigeria . So far, FBNH remains a refurbished financial engine and analysts are raising an alarm, saying the bank could not afford another round of crisis .To them , it is capable of endangering the little recovery gained between 2023 and 2024 financial years.
This fear may not be farfetched. No doubt, despite the so-called improvements or recoveries ,certain endemic signals from its books between those two financial years still continue to send jitters down the spines of many shareholders; even some optimists are becoming largely apprehensive: the rising impairments, increased funding costs, humungous operating expenses and declining share price remain the recurring challenges that make its investors to become jittery as ever, confirming the lopard has refused change its spot.
The figures from its book confirmed it too .In its latest 2024 financial year records,its Net impairment loss on financial assets: N410.810 billion, that is an increase of +82.62% YoY ;loans and advances to customers grew by 41%, but interest income from loans and advances to customers declined by 13.42% to N1.364 trillion; the interest expense on its deposits rose by 135%, making up 58% of total interest expenses. The last issue signals that while the bank had grown its deposit base, it is facing higher funding costs; the bank’s share price experienced a significant decline of 27% YtD in 2024.
A critical impact of above negativities is disastrous and calamitous. From its latest 2024 financial year results ,while the bank made N3.3tr as its gross earnings,only 21 percent of that huge amount was converted to profit after tax , confirming its miserable profit margin from its profit engine. This manifests in the bank’s less inspiring strategic position and becomes clearer when FBNH is benchmarked with its peers . Ironically, the bank’s largest single shareholders are currently at war leaving on the ground an uneasy calm.
For the current squabbles, the stock investors have continued to ask whether the current signals on the horizon are different from those 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 .
Truly , some 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.
Unfortunately, it was to reverse the above ugly scenario that some shareholders battled to bring in Otedola as its group board chairman in the early 2024 .More importantly, to reclaim its lost industry leadership laurel which was due partly to the above circumstances . To regain its industry leadership, the board is also expected to rejig the bank strategically,organisationally and competitively for better profitability,service delivery and operations , all as the bases of which he was elected .He is expected to achieve this by creating the necessary synergies between the board and the management , tapping into his experience and skills .
Does this man have what it takes to achieve the above? To his admirers,Otedola by his pedigrees and antecedents , has what it takes to achieve the above expectations .Though there were mixed feelings surrounding his election ,however, what could not be disputed is that he has rich experience to turn FBNH around if he is not excessively selfish as his critics alleged.
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.
But his critics alleged he is a fighter and could be selfish too . For those that opposed his election, Otedola is an opportunist and a schemer ; he is allegedly sneaky , belligerent, contentious, aggressive, truculent, combative or pugnacious . To us in the Decisionmakers weekly ,he is a no nonsense man .
In corporate world ,in the last few years , those who underrated him had their fingers burnt .Farouk Lawan, a veteran politician ,was jailed for receiving a bribe from him . Moreover, the serial billionaire investor, Femi Otedola, at another point in time, 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 the 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 with him , 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 for him 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 , to his critics , he is merely witch-hunting and battling to pocket the bank for his selfish desires .
No matter their differentials, one thing that no one could dispute is that the bank is largely unsettled and yet to reclaim its lost industry leadership ambition its stakeholders expected .This could deteriorate the health of FBNH, some analysts warned.
Another fact is that some insiders are now trapped in a web of splintering camps and splitting loyalties as Otedola engaged his arch rival for a battle over who posseses 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 still remains fragile. These are still not the expectations of its stakeholders from the new management.
As the crisis in the Bank is festering and the standoff continues , the question is : why is Otedola fighting Otudeko and in whose interest? The answer is crystal clear: who holds the single largest share of the institution between the duo of Otedola and Otudeko? This is the question that must be answered for this bank to be peaceful and for the progress to be made .
However , from some reports in the press , First Bank Holdings, in its audited accounts for 2023, had put Otedola as the single largest shareholder with a 9.41 per cent s⁸take in the financial institution. There is no controversy over this .
But 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.
As the battle continues endlessly ,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 that 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 members of such are at war or 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 are now brewing a litany of court cases pending determination and have continued to raise concerns for investors holding the bank’s shares as well as the depositors.
Accussatons and counter accusations have become the order of day among the camps involved in the ongoing battle. “Otedola was brought to bring peace ,but the opposite is the case . The bank has preoccupied itself with legal tussles over who owns what amount of shares” , an insider lamented . Some observers alleged the current crisis a product of witch-hunting , a mere personal vendetta by Otedola . “All of a sudden, one allegation after the other had been leveled against Otudeko , his arch -opponent in a race of leadership supremacy” .
One of these allegations the one from a former employee of First Bank of Nigeria Limited, Adesuwa Ezenwa .The woman, a source said , 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 former 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.
Some aggrieved shareholders accused Otedola of allegedly employing a surreptitious means to snatch the control of the bank . Specifically , he accused of making a move for a private placement as his last resort to achieve this . 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 ,the outraged shareholders of First Bank, Nigeria’s oldest financial institution allegedly claimed it was their move against the shocking bid by Otedola that frustrated his ambition. “How could he 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?”, a source queried .
Many of the angry shareholders believed 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.
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
Another major accussation against Otedola is that the man 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.
To avert the reality of those allegations , investigations revealed some shareholders had written to the board of the bank and demanded for an emergency general meeting, EGM to 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.
Fight with Odukale
But 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 so unbearable that 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 the finish over the control of the bank .
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.”
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”. In other words, Babalola’s was both driven by the frustration from the power tussles between Otedola and Odukale as well as from the CBN .
The battle between the 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.”
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.
The negative impact of the squabbles between the duo was ernomous. 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 return of the evil years of conflict between the board and the executive leadership of the bank that nearly claimed its going concern, to some analysts and observers , is a deep indictment of Otedola’s poor leadership in the recent time.
However , those in the camp of Otedola too are not folding their arms . They alleged that Otudeko was behind the woes of the bank as the former Chairman of its board. They accused of being behind the insiders loans that made regulatory authorities to have inroads into the affairs of the bank by way of forbearance.
If care is not taken , the current scenario may be the return another crisis that FBNH may not survive. The memory of the past crisis is not what anyone wish to experience again . 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 continued to struggle with its badly damaged strategic position 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.
Moreover , 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 led to unethical power struggles and weak corporate governance , its 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.
