On Monday, a group of shareholders staged a protest at the headquarters of First Bank of Nigeria Holdings in Lagos.
Their grievance centered around efforts to obstruct the financial institution from conducting its scheduled Annual General Meeting.
The demonstrators, primarily consisting of minority shareholders, congregated outside the headquarters, brandishing placards and vocally advocating for the institution’s right to fulfill its legal obligation of hosting AGMs.
Disputes have arisen regarding ownership stakes within FBN Holdings, triggered by the acquisition of a majority interest by a company associated with the prominent billionaire entrepreneur, Oba Otudeko.
Mukhtar Mukhtar, the Chairman of the Trusted Shareholders’ Association, voiced the dissatisfaction of the protesting shareholders, highlighting their displeasure with the move to impede the AGM proceedings.
He said, “We are here at the First Bank office to register our displeasure, our discontentment and rejection of the attempt by some shareholders to prevent the Annual General Meeting of First Bank from holding and preventing the consideration of some very important resolutions for the progress of the bank.
“These shareholders have approached the court to stop First Bank from raising capital like other banks are doing and then not to admit some directors onto the board of the bank. Those who have gone to court to stop the AGM know that it is illegal. AGMs are statutory meetings.”
In July, FBN Holdings announced its plan to secure additional funds by conducting a rights issue, subject to the consent of shareholders during the upcoming Annual General Meeting set for this month. The financial institution outlined its strategy to generate capital by issuing 8.974 billion ordinary shares, each valued at 50 kobo.
Mukhtar also called for the intervention of the Central Bank of Nigeria, Securities and Exchange Commission and Nigerian Stock Exchange in the ongoing tussle for the lender.
He said, “The regulators, the Central Bank of Nigeria, Nigerian Stock Exchange, and Securities and Exchange Commission should wade into this problem. They know that AGMs are statutory.
“We know that the management of First Bank wants the AGM to hold and for all the resolutions to be considered but they have been prevented from holding the AGM by some shareholders. First Bank of Nigeria has a systemic and important place in the economy of Nigeria. It is a bank that must be allowed to grow. It doesn’t make sense for the regulators to be silent in this case.
“We will continue to protest and write petitions. How can regulators just keep quiet while a few persons hold a bank of First Bank status to ransom? The regulators cannot continue their complacent behaviour in the face of this situation. They must exert some regulatory powers. We cannot afford to let First Bank die, therefore the regulatory authorities must act.”
Nigerian Banks’ Borrowings from CBN Surge 835% in a Month, Raising Liquidity Concerns
The Nigerian banking sector has witnessed an unprecedented 835% surge in borrowings from the Central Bank of Nigeria (CBN) in the span of just one month, igniting concerns over the nation’s liquidity stability.
Data reveals that banks’ dependence on the CBN has reached new heights, with their borrowings skyrocketing from a relatively modest N323.97 billion in August to N3.03 trillion in September. This remarkable increase underscores a growing reliance on the CBN’s support in times of financial stress.
This surge in borrowing activity has primarily been attributed to the CBN’s stringent monetary policies aimed at curbing inflation and managing the demand for foreign exchange. These policies have, in turn, squeezed commercial banks, compelling them to tap into the CBN’s Standing Lending Facility (SLF) for immediate liquidity needs.
Despite the escalating dependence on CBN funds, the Monetary Policy Committee (MPC) of the apex bank insists that the Nigerian banking sector remains fundamentally robust. MPC member Adenikinju Festus highlighted key indicators, including Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) ratios, which still align with prudential standards. Furthermore, liquidity ratios have improved, and returns on equity and assets have risen.
However, the banking industry’s persistently high operating costs are raising alarms. In comparison to international standards, Nigerian banks are grappling with substantially higher operating expenses, prompting concerns about their long-term sustainability.
In a parallel development, the CBN’s Development Finance Department has disbursed a total of N9.714 trillion to various sectors of the economy over the past three years, with manufacturing and industries receiving the largest share at 32.6%.
Other sectors, including energy, agriculture, services, micro, small, and medium enterprises (MSMEs), export, and health, have also benefited significantly from these disbursements.
While the CBN remains committed to fostering sustainable economic growth, the surging dependence of Nigerian banks on short-term borrowings from the central bank is casting shadows on the sector’s long-term stability.
As Nigeria grapples with these liquidity concerns, the financial industry and regulators face the challenging task of charting a course towards a more resilient and sustainable banking environment.
Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting
The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.
Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.
In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”
While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.
President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.
The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.
The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.
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