Otudeko’s Final Exit: Uneasy Calm Over Otedola Game-plan
Will Otedola Break Free from Past Errors?
The recent dramatic exit of Oba Otudeko from First Holdco and Femi Otedola’s ascension to largest single shareholder sent shock waves through the financial world, sparking high hopes for a turnaround. However, the bank’s Q1 2025 results which delivered a crushing blow as its profits plummeted dashed such expectations of a swift revival under Otedola’s stewardship. Has the anticipated game-changer fallen short of expectations, or are the challenges deeper-rooted?
Before the exit of Otudeko, First HoldCo’s Q1 2025 financial results released earlier reveal a concerning trend, with the company’s profit plummeting to N171.1 billion, representing a 17.8% year-on-year decline. This downturn is primarily attributed to a substantial swing in fair value gains from financial instruments and a shift from a foreign exchange loss to a gain, which, although positive, was insufficient to offset the impact of the fair value losses.
The company’s financial performance was marred by a N47.9 billion net loss on financial instruments at fair value through profit and loss (FVTPL), starkly contrasting the N288.8 billion gain recorded in Q1 2024. Operating expenses also rose, contributing to a 20.3% decline in operating profit to N186.7 billion. Profit before tax stood at N186.5 billion, down from N234.2 billion in Q1 2024.
The above development has been generating an uneasy calm and raising another question: Can he he make the difference?
The current fear surrounding his emergence as the largest shareholders may not be farfetched . Femi Otedola’s appointment as Chairman of FBN Holdings Plc was regarded a testament to his exceptional business acumen and leadership prowess. As a visionary entrepreneur, Otedola has a proven track record of transforming corporations and pioneering businesses. His success in the oil and gas industry, particularly with Zenon Petroleum and Gas Limited and African Petroleum Plc (now Forte Oil Plc), demonstrates his ability to disrupt and redefine standards. His strategic decision-making and leadership skills have enabled him to grow businesses, create value for shareholders, and establish himself as a respected figure in the Nigerian business landscape.
Otedola’s business interests span multiple sectors, including power, storage, shipping, insurance brokerage, and petroleum retail outlets. His experience on corporate boards, including his membership on the National Economic Management Team, has equipped him with a deep understanding of the economy and the intricacies of governance. As Chairman of FBN Holdings Plc, Otedola is well-positioned to leverage his expertise and network to drive growth, improve governance, and create value for stakeholders. His philanthropic efforts, particularly in the education sector, also demonstrate his commitment to giving back to society. With his appointment, FBN Holdings Plc is poised for a new era of growth and transformation under Otedola’s leadership.As the situation unfolds, it remains to be seen how Otedola’s increased control will impact First Bank’s future direction and performance.. But the above outstanding profile has failed to deliver the expected competitive results .
Another question whose answer could not be determined for now is whether Otedola could break free from past errors. Upon the exit of Otudeko, some shareholders have cautioned against abuse of corporate governance processes, emphasizing the need to protect the legacy institution.
Their fear is rooted in their past experience among the influential shareholders. The emergence of Femi Otedola as the largest single shareholder has sent jitters through the financial community, with some potential and existing shareholders fearing he may succumb to the same temptations as his predecessors. This concern stems from the worry that Otedola may prioritize his own interests over the bank’s well-being, potentially sparking another power struggle. As a result, shareholders with the resources to challenge him are bracing themselves for a possible battle, reminiscent of the recent tumultuous period that led to Otudeko’s exit.
Their fear may not be farfetched . Otedola’s battle for influence at First Bank Holdings (FBNH) has been a masterclass in strategic maneuvering. His battle with Odukale after Otudeko was sacked in 2021 confirmed this as much . Despite initially denying ambitions to chair the bank or its holding company, Otedola’s actions revealed a more ambitious agenda. He leveraged his 7.57% stake to shape the institution’s direction, outmaneuvering other significant shareholders, including Oye Hassan-Odukale.
Through calculated moves, Otedola effectively positioned himself for a major role in the bank’s future. His public statements belied his true intentions, as he skillfully navigated the complex web of interests and power dynamics within FBNH. Today, Otedola’s influence is undeniable, with his denied interests having become a reality.
By acquiring a significant stake and asserting his influence, Otedola has achieved his objectives, despite initial claims of disinterest. His actions demonstrate a calculated approach to achieving power and control, leaving no doubt about his ambition and strategic prowess
His past controversies revealed otedola is to be feared and be respected . Femi Otedola, a billionaire businessman, has demonstrated a fearless attitude in taking on powerful personalities in Nigeria’s business and political landscape. He has directly engaged with individuals such as Oba Otudeko and Farouk Lawan, showing no hesitation in standing up for himself. In his dispute with Otudeko, Otedola eventually emerged as the largest shareholder in First HoldCo after a long-standing battle. Similarly, he played a crucial role in exposing Farouk Lawan’s corrupt practices, providing evidence that led to the former lawmaker’s seven-year jail sentence for bribery.
Otedola’s confrontational approach extends to his business dealings, as seen in his public feud with Tony Elumelu over Transcorp Plc. Despite Elumelu’s influential position, Otedola did not back down, accusing him of betrayal and taking advantage of his financial difficulties. The two eventually resolved their differences, with Otedola divesting his stake in Transcorp.
In another high-profile dispute, Otedola accused Jim Ovia, chairman of Zenith Bank, of fraudulent transactions involving his company, Seaforce Shipping Limited. Undaunted by Ovia’s powerful position, Otedola pursued the matter, even producing evidence of discrepancies in the bank’s statements. The matter is currently being settled out of court. Through these battles, Otedola has shown a willingness to challenge the powerful and stand up for his interests.
The above fear notwithstanding , First Bank’s tumultuous years under Otudeko were marked by a perfect storm of power struggles, greed, and recklessness, as top single shareholders clashed in a bitter battle for ownership control, crippling the institution’s stability and paving the way for a toxic mix of weakness and fraud to thrive, ultimately endangering its fragile recovery and culminating in the ousting of Oba Otudeko.
The consequences were devastating. The bank’s troubles became apparent in 2016 when the Central Bank of Nigeria’s (CBN) examination revealed a dire financial situation. The Capital Adequacy Ratio (CAR) and Non-Performing Loans (NPL) ratio significantly breached prudential standards. Poor credit decisions, substantial non-performing insider loans, and weak corporate governance practices were identified as the root causes. The shareholders, including FBN Holdings, lacked the capacity to recapitalize the bank to meet minimum requirements, despite repeated CBN entreaties.
The bank’s financial woes were stark: a record 45% bad loan ratio in 2015, total loan impairment of over N565 billion between 2016 and 2020, with N376.4 billion provided for in 2016 and 2017 alone. Profit before tax plummeted to N10.2 billion in 2015. FBNH’s share price plummeted to N3 per share, and more alarmingly, depositors’ funds, which were over ten times the shareholders’ funds, were highly endangered under Oba Otudeko’s watch.
The second phase of First Bank’s power struggle unfolded with intensity after Oba Otudeko’s ousting, as new rivalries emerged. Femi Otedola and Oye Odukale, both influential shareholders, found themselves at odds in a bitter battle for ownership control. However, the dynamics shifted dramatically with Otudeko’s return, courtesy of a controversial acquisition that made him the single largest shareholder. This development reignited tensions, pitting Otudeko against Otedola in a fierce dispute that threatened to destabilize the institution once again. The power struggle between Otedola and Otudeko has raised concerns about First Bank’s stability and future prospects.
But Otedola seemed to have outmaneuvered Otudeko, uncovering a massive fraud allegation that allegedly implicated him. Oba Otudeko’s tenure as chairman of First Bank Holdings was marred by controversy. A former employee, Adesuwa Ezenwa, accused Otudeko of fraud, claiming she was instructed to disburse N12 billion in loans to companies linked to him, which were allegedly rerouted to other firms. Ezenwa’s lawsuit seeks N500 million in damages and N25 million in legal fees, asserting her dismissal was unfair. This isn’t the only controversy surrounding Otudeko; the Supreme Court upheld a ruling requiring him to repay over $17 million in debt, with allegations of asset transfers to avoid repayment ¹.
The above allegation appeared to be the last straw that broke the camel back . Otudeko had no option than to humbly jettison his ambition and exit First Bank . He has sold off his 10.43 billion shares, valued at approximately N323.45 billion, to RC Investment Management Limited. This transaction gives RC Investment an estimated 29% stake in the bank, making it the current largest single shareholder.
Femi Otedola, who had been in a power struggle with Otudeko, has regained his position as the largest shareholder, with his stake in the bank increasing to about 15% after Otudeko’s exit. However, RC Investment Management Limited is now the dominant force, having acquired shares from both Otudeko-linked firms and Odukale-linked entities.
The buyer, RC Investment Management Limited, is linked to Samuel Babatunde Sule, but little is publicly known about the company’s operations or strategy for First Bank Holdings. The deal has raised questions about transparency and the future direction of the bank.
The exit of Oba Otudeko from First HoldCo, the parent company of First Bank, marks a significant shift in the financial institution’s ownership structure. Shareholders have reacted positively to the news, with some describing the transaction as a win-win situation for both parties. The deal is also expected to lay to rest ongoing litigation, including a N12.3 billion fraud case against Otudeko. First Holdco’s shares have surged over 20% in two trading sessions, reflecting market optimism surrounding Otudeko’s exit and potential leadership changes.
