Shareholders Hail First Bank’s Recapitalisation  Bid, Appointment of Otedola as Director

Goddy Egene

Some shareholders of FBN Holdings Plc have commended the decision of   its Board of  Directors to raise fresh capital, saying it is a proactive  move that will place  the financial group  on a stronger footing.

In its notice of annual general meeting (AGM)scheduled to hold virtually on August 15, 2023, the board of FBN Holdings  has proposed that the directors be authorised to inject fresh capital into the financial institution.

They are also asking that Mr. Samson Oyewale Ariyibi  be elected an executive director and  Mr.  Olufemi Otedola,  be elected a non-executive director. Some stakeholders have faulted the proposed virtual AGM and election of Otedola as a director.

However, shareholders under the aegis of the Association for the Advancement of Nigeria Shareholders (AARNS) have said the board of FBN Holdings Plc should be commended for thinking ahead considering the   economic situation which may eventually lead to recapitalisation exercise  in the banking sector.

 Speaking to THISDAY, the President of AARNS, Dr, Faruk Umar, said  one of the limitations of  the commercial subsidiary of FBN Holdings, First Bank of Nigeria Limited, has been  its low capital base.

According to him, the board has seen this weak point and has decided to hit the market early for the capital raise ahead of others.

“As shareholders of FBN Holdings and who have confidence in the board and management  because of their proactive disposition towards the running of the financial institution, the decision to raise fresh capital is very timely and proactive and should be given all the necessary support.  One of the limitations of First Bank is in its capital base  compared to its competitors , it is far behind. Besides,  there is the possibility of Central Bank of Nigeria (CBN)  asking banks  to recapitalise. Therefore, First Bank should be commended for being proactive in this regard,” he said.

On the decision to hold a virtual AGM, Umar said   the  board  did not violate any   rules of Corporate Affairs Commission (CAC) or any other regulatory authority.

“Shareholders can send their proxy forms as well  as join the meeting virtually . This is not the first time the bank is doing a virtual meeting. So the argument that the bank is trying to avoid robust discussion on the agenda does not hold water. Whether the meeting is physical or virtual, the voting is going to be by poll,” the AARNS boss said.

Speaking on the proposed election of Otedola as a director of the bank, Umar said: “This is a healthy development given his (Otedola’s) enormous board experience. In the past, the shareholders appointed almost everybody on the board of the bank and its subsidiaries, and we never complained. The current board, which was reconstituted by the CBN has done very well looking at the performance of the bank in the financial year ended December 2022.”

  “The Managing Director, Dr. Adesola  Adeduntan, has rightly justified the extension of his tenure  granted by CBN. The performance of the bank is unprecedented and nothing should be done to retard this new growth trajectory of the financial conglomerate. We call on the CBN to ensure no shareholder disrupts the effort of the board of the bank in positioning it to achieve better results for all stakeholders,” he added.