Issues as Okonkwo, Otedola rekindle investors’ confidence in First Bank

THOMAS IMONIKHE

 

The assumption of duty of Mr. Nnamdi Okonkwo as the Group Managing Director, GMD of First Bank Nigeria Holdings Plc will certainly elicits renewed positive massive reactions from the investing public especially those interested in the financial services sector.

 

But analysts believe that his immediate challenges clearly will include how best  to strengthen and reposition the Group to grow its balance sheet and in conjunction with other similar institutions further stabilize the sector for it to effectively partner with government to achieve sustainable economic growth in the current post COVID-19 recovery efforts.

 

Okonkwo, whose appointment by the Board of FBN Holdings Plc, took effect from January 1, 2022 replaces Mr. U.K. Eke who formally retired December 31, 2021, from the Group having served for two terms.

 

His engagement has since been ratified by the regulatory authority, the Central Bank of Nigeria (CBN) while the new GMD is the immediate past Chief Executive Officer/ Managing Director of Fidelity Bank Plc.

 

The coming on board of the result-oriented and focused banker according to financial experts, will certainly trigger renewed interest by prospective shareholders in the Group’s stocks as well as consolidation of share rally witnessed in First Bank Nigeria Limited after the emergence of Otedola Olufemi Peter as its single biggest shareholder with 7.5percent equity.

 

The oldest financial institution in the country which was founded in 1894 as Bank of British West Africa got renamed First Bank of Nigeria in 1979.

 

Even though the billionaire businessman was recently confirmed as the largest shareholder in the bank, with an equity stake of about 5.07 percent, or 1,818,551,625 shares, the battle for the soul and heart of the bank earlier raged for days before he reportedly raised his stake by about 2.5 percent to guarantee his position as the undisputed largest individual shareholder in the bank.

 

According to impeccable sources, the tycoon purchased an additional 898,730,515 shares in the bank, which represent about 2.5 percent of the bank’s total shareholding.

 

Consequently,  the acquisition effectively increased the total number of shares owned by the billionaire to 2,717,282,140 shares, or 7.57 percent, a feat that will enable him make at least three board appointments in the immediate future.

 

Of this amount, according to sources, Otedola owns about 210 million shares directly, with the remaining shares owned by companies linked to him, such as Calvados Global Services Limited, Shetland Global, Wells Properties, Impetus Synergy and Primrose Global Concept.

 

At the bank’s share price in December, Otedola’s 7.57percent stake was worth N31.8 bn ($77.4 million) although no official statement has been made regarding the actual amount the billionaire paid for his shares in the bank.

 

Therefore the acquisition of additional shares ended the controversy over who possesses the majority stake between Tunde Hassan Odukale and Otedola in the bank.

 

So financial analysts believe that Okonkwo’s assumption of duty at FBNH Plc, the parent company of First Bank Nigeria Limited which is one of Nigeria’s largest financial institutions is not only apt but significant for many reasons especially coming amidst rekindled interest by the investors.

 

In other words, the new GMD having the backing of a reputable business turn around guru like Otedola in conjunction with his management team will initiate radical and new strategic direction for the Group, considerably raise quality of board decisions and project execution commitment to enhance its market performance thereby improving return on equity (RoAE).

 

Okonkwo’s experience which span decades in the banking sector has placed him in good stead to achieve set targets in the Group based on his pedigree. He holds a B.Sc in Agricultural Economics from the University of Benin and also MBA, Banking and Finance from Enugu State University of Science and Technology.

 

He is also a graduate of the Advanced Management Programme (AMP) of INSEAD, the Business School for the World in France and commenced his banking career in the financial services industry in 1990 at Merchant Bank of Africa, Nigeria.

 

In 1993, he moved to Guaranty Trust Bank (GTBank) and rose to become a branch manager before moving on to other banks.

He worked with other financial institutions before he joined United Bank for Africa (UBA) Plc, where he held various managerial and leadership positions.

 

He was once Regional Bank Head in Lagos; Regional Director, Federal Capital Territory; Project Director, and Head of Corporate Banking and Multinational Corporates Division; Managing Director/CEO of UBA Ghana; and finally, Regional CEO of the bank’s West Africa Monetary Zone covering Ghana, Liberia, and Sierra Leone.

 

However, in 2012, Okonkwo left UBA and joined Fidelity Bank Plc as the Executive Director in charge of the Bank’s businesses in Southern Nigeria thus overseeing the bank’s entire business across Southern Nigeria excluding Lagos and West.

 

The new GMD also held the Executive Director position until January 1, 2014, when he was appointed the Managing Director/CEO of Fidelity Bank Plc while his tenure ended on December 31, 2019.

 

Besides Okonkwo, the board of FBN Holdings Plc approved the appointment of Mrs. Tope Omage, as non-Executive Director in First Bank of Nigeria Ltd, subject to the approval of the CBN as well as renewed the appointments of Dr. Adesola Adeduntan and Mr. Gbenga Shobo as the Managing Director and Deputy Managing Director of First Bank of Nigeria Ltd for another term.

 

Also, the board approved the renewal of the appointments of Mr. Kayode Akinkugbe and Mr. Taiwo Okeowo as the Managing Director and Deputy Managing Director of FBNQuest Merchant Bank Ltd respectively, for another term and  the appointment of Meristem Registrars Ltd as the new Registrars to take over the Register of Members of FBNH in replacement of First Registrars and Investors Services Ltd.

 

The appointment took effect from December 1, 2021 while decisions of the board has set the tone for appropriate response to corporate governance integrity and credibility in the nation’s banking sector.

 

But reviewing the  Audited results of the Holding Company for the period ended September 30th, 2021 which indicated negatives in most parameters including

gross earnings which fell by 2.8 percent to N427bn from N439bn in the previous quarter;  profit before tax declined by 16.4percent to N52.9bn from N63.3bn and profit after tax decreased by 40.2percent to N40.79bn from N68.16bn, an analyst who pleaded anonymity said Okonkwo’s coming would witness a rebirth for the organization because ‘he will confront the challenges and refocus on banking fundamentals’.

 

Specifically, he maintained that the new GMD is expected to bring his wealth of experience to consolidate on his predecessor’s achievements which include building ‘sustainable synergies across the FBNHoldings Group, fostering collaborations to maximize business development opportunities with diverse stakeholders globally’.

 

 

He is expected to vigorously sustain the  upsurge in value creation for shareholders and other stakeholders, with a diversified and healthier portfolio as well as insists on institutional best governance practices and highest professional standards of transparency adding that the proficient banker would restore the company on the path of profitability and dividend payments to shareholders.