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First Bank of Nigeria (FBN) has cancelled a planned extraordinary general meeting (EGM) to discuss a N300 billion capital raise, raising concerns about the bank’s financial health. This news comes amidst the resignation of Managing Director Dr. Adesola Adeduntan and his replacement by Mr. Olusegun Alebiosu as acting director.
Capital Shortfall and Delayed Financials
First Bank is the only major Nigerian bank (FUGAZ – First Bank, United Bank for Africa, Guaranty Trust Bank, Access Bank, Zenith Bank) yet to release its 2023 financial statements. This delay coincides with the Central Bank of Nigeria’s (CBN) new capital requirement increase, announced in March 2024. First Bank needs to raise N300 billion by April 2026 to meet the new N500 billion minimum for international banks.
Competing Banks Forge Ahead with Capital Raising
Other FUGAZ banks have already begun capital-raising efforts. Access Bank plans to raise $1.5 billion and N360 billion, while Zenith Bank and GTB are also seeking shareholder approval for capital increases. UBA is raising fresh capital through a share sale.
Shareholder Concerns
The lack of transparency surrounding the capital raise cancellation and delayed financials has caused unease among First Bank shareholders. Some fear “something is happening behind the scene” and are worried about the bank’s stability.
New Leadership, New Direction?
First Bank appointed Mr. Alebiosu as acting managing director after Dr. Adeduntan’s sudden departure. Shareholders hope the new leadership will prioritize releasing the financial statements and a clear plan for meeting the capital requirements to restore investor confidence.
Looking Ahead
First Bank faces a crucial period. It must address its capital shortfall, reassure investors with financial transparency, and navigate a leadership change. The bank’s ability to meet these challenges will determine its future success.
