CBN-Directed Board Changes At First Bank and FBNH Addresses Governance Issues - S and P

Proshare

Wednesday, May 12, 2021 / 09:44 AM / By S&P Global Ratings / Header Image Credit: Ecographics


Proshare Nigeria Pvt. Ltd.


S&P Global Ratings said that changes to the boards of First Bank of Nigeria Ltd. (FBN; B-/Stable/B) and FBN Holdings PLC (FBNH; B-/Stable/B), directed by Central Bank of Nigeria (CBN), address the banking group's corporate governance challenges and ensure the Nigerian banking sector's financial stability. Our ratings on FBN and other Nigerian banks remain constrained by shortcomings in corporate governance and transparency, among other factors.

 

The CBN has replaced the entire boards of FBN and FBNH, and reinstated the former executive directors and CEO Dr. Adesola Adeduntan. The CBN also requested FBN unwind certain exposures and divest from its participation in a non-permissible company, also pointing to potential corporate governance lapses at the bank. However, Dr. Adeduntan's reinstatement and the re-appointment of the other executive directors underscores the CBN's confidence in the existing management team to continue the turnaround of the third-largest banking group in Nigeria, which has total assets of Nigerian naira 7.7 trillion. T

 

The CBN's actions are particularly notable considering the regulator views FBN as a systemically important financial institution. We are of the view that the CBN's historical approach has been more reactive than proactive, as illustrated by the Skye Bank episode. That said, recent actions, while disruptive in the near-term, may signal a more direct and possibly decisive supervisory approach to alleged failings in the management and governance of regulated institutions.

 

FBN's overall credit profile has gradually stabilized since 2016, with a capital adequacy ratio of 17% in 2020 against a 15% minimum requirement. Similarly, the bank's asset quality indicators improved significantly, with nonperforming loans (NPLs) reducing to 7.7% in 2020 from 20%-25% since 2016. We expect NPLs will average at about 9% over the next 12-18 months to reflect the risks that a portion of restructured and performing loans might come under pressure due to the weak macroeconomic environment in Nigeria. The bank's liquidity remains sound, with its regulatory liquidity ratio above 34%.


Proshare Nigeria Pvt. Ltd.


Related News - NPLs and Banks

  1. Of First Bank and Bad Debtors; A System's Throbbing Headache
  2. NPL and Bad Debtors - The Case for a New Industry Approach - Download the Full PDF Report - Debtors Africa, May 13, 2020
  3. NPL and Bad Debtors - The Case for a New Industry Approach - Executive Summary PDF - Proshare, May 14, 2020
  4. AMCON and Financial Services Debt Burden in Nigeria - Aug 17, 2018
  5. Bank NPLs (25) - The Customer's Options in a New Debt Order
  6. Bank NPLs (24) - Handling Bad, Delinquent and Recalcitrant Debtors via DiMR
  7. Bank NPLs (23) - The Case for a New Approach
  8. Bank NPLs (22) - Benchmarking Best Practice and International Debtors List
  9. Bank NPLs (21) - The Role and Place of Credit Bureaus and Rating Agencies in Recovery Efforts
  10. Bank NPLs (20) - A New Cottage Industry Emerges - Debt Factors and Loan Purchase Firms
  11. Bank NPLs (19) - Issues Around Nigerian Bank Debtors List
  12. Bank NPLs (18) - Understanding The Impact Of IFRS 9 On Selected Nigerian Banks
  13. Bank NPLs (17) - IFRS and Accounting Standards
  14. Bank NPLs (16) - The Place of Arbitration, Resolution or Debt Management
  15. Bank NPLs (15) - AMCON and Its Role in Debt Recovery
  16. Bank NPLs (14) - Regulatory Guidance, Conduct and Enablers
  17. Bank NPLs (13) - Impact on Growth of the Credit Market
  18. Bank NPLs (12) - Impact of NPLs on Income Trends
  19. Bank NPLs (11) - Technical Analysis on Banks' NPLs - LDR
  20. Bank NPLs (10) - Technical Analysis on Banks' NPLs - Leverage Ratio
  21. Bank NPLs (9) - Technical Analysis on Banks' NPLs - Liquidity Ratio
  22. Bank NPLs (8) - Technical Analysis on Banks' NPLs - NPL Ratio
  23. Bank NPLs (7) - Technical Analysis on Banks' NPLs - Profitability
  24. Debtors Africa: AMCON; Chike-Obi's Alternative View
  25. Bank NPLs (6) - Technical Analysis on Banks' NPLs - Gross Earnings
  26. Bank NPLs (5) - How Banks Fared In 2018; Holding Up Against IFRS9 Tropical Winds
  27. Bank NPLs (4) - A Short History of Recovery Efforts - A Time Series Analysis
  28. Bank NPLs (3) - The State of NPLs
  29. Debtors Africa Launches Searchable Digital Database of Recalcitrant and Delinquent Debtors
  30. Value of Downgraded Sovereign Debt Not as High as Previous Crises
  31. Bank NPLs (2) - The Banking Industry and Its NPL Position
  32. Bank NPLs (DR 1) - The Case for a New Industry Approach


Proshare Nigeria Pvt. Ltd.


Related News

  1. Fitch Affirms FBN Holdings' Ratings at 'B-', Negative After Board Removal by Central Bank
  2. Moody's Places First Bank's Ratings on Review for Downgrade Following Central Bank Actions
  3. FBN Holdings Writes NGX on Recent Developments in First Bank and FBN HoldCo
  4. CBN Removes Boards of First Bank of Nigeria, FBN Holdings; Appoints New Chairmen
  5. PDF: CBN Scope, Conditions And Minimum Standards For Commercial Banks Regulations NO. 01, 2010
  6. PDF: Guidelines For Licensing And Regulation Of Financial Holding Companies In Nigeria
  7. PDF: CBN Governor's Statement on the Purported Management Change at the First Bank of Nigeria Ltd
  8. FBNH Appoints Mr. Gbenga Shobo as Managing Director Alongside New Executive Directors
  9. FirstBank's New Board Appointments, CBN Reacts
  10. FBN's Change of Guards; Adeduntan Passes Baton to Shobo
  11. FBNH Announces The Appointment of Alhaji Yakubu Wanka As A Non-Executive Director Of First Bank
  12. Firstbank CEO, Dr. Adesola Adeduntan, Becomes A Member of Bretton Woods Committee
  13. FirstBank Appoints Mrs. Oluwande Muoyo as a Non-Executive Director
  14. FBNH Announces the Resignation of Mrs. Oluwande Muoyo As An Independent Non-Executive Director
  15. Adesola Adeduntan, CEO, Firstbank - How to Do Well by Doing Good
  16. FirstBank's Adesola Adeduntan Bags 'Best Chief Executive Officer' Award
  17. FBNH Appoints Mr. Muhammad K. Ahmad as Non-Executive Director
  18. FBNH Appoints Omatseyin Akene and Bosede Adebola as Directors
  19. FBNH Appoints Dr Hamzat Sule as Independent Non-Executive Director
  20. FBNHoldings Appoints Ariyibi to FBNQuest Capital, Borodo to FBNQuest Trustees Boards
  21. First Bank strengthens Board, appoints Bayo Adelabu as Executive Director


Proshare Nigeria Pvt. Ltd. 


Related News - First Bank

  1. FirstBank Launches a New Corporate Website, Reiterates its Commitment to Service Delivery Excellence
  2. FirstBank CEO Lists Technology, Capacity as Key for Post-COVID-19 Growth
  3. First Bank Promotes Diaspora Remittances, Rewards Customers with Extra N5 for Every Dollar Received
  4. First Bank Supports Schools with Array of Exciting Educational Solutions
  5. First Bank Deepens Financial Inclusion with Largest Agent Banking Network, Empowers SMEs
  6. S and P Global Ratings Affirmed First Bank of Nigeria Ltd Ratings, Outlook Stable
  7. First Bank Promotes Career Development of Staff, Graduates Third Set of its SMDP Participants
  8. Moody's Announces Completion of a Periodic Review of Ratings of First Bank of Nigeria
  9. First Bank Convenes SME Week, Reinforces its Support to the Engine of the Economy
  10. First Bank: Still Standing Gidigba 125 Years After
  11. First Bank Holds 125km Walk to Mark 125th Anniversary
  12. First Bank's Kicks Off 125th Anniversary Celebration With an Official Hosting of its Ceremonial Flag


Proshare Nigeria Pvt. Ltd. 


Related News - FBN Holdings Plc

  1. FBN Holdings Plc Declares N15.6bn PAT in Q1 2021 Unaudited Results;(SP:N6.90k)
  2. FBNH Declares N89.7bn PAT in 2020 Audited Results, Proposes 45K Final Dividend; (SP:N7.25k)
  3. FBNH Declares N65.9bn PAT in Q4 2020 Results, (SP:N7.60k)
  4. FBNH Releases its 2019 Sustainability Report
  5. FBNHoldings Group Wins Big at the 2020 Great Place to Work Awards
  6. FBNH Announces the Issuance of Unsecured Notes With 5-Year Maturity
  7. FBNH 2020 H1 Result: Profit Up 14.3% Y-o-Y, But Growth Strategy Still Vulnerable
  8. FBNH Injects N25bn Into First Bank
  9. FBNH Reacts to Online Publication On Merger Talks Involving First Bank
  10. FBNH Declares N49.5bn PAT in Q2 2020 Results, (SP:N5.00k)
  11. Fitch Affirms FBN Holdings Plc at 'B-'; off RWN; Outlook Negative

 

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP