Credit rating firm Moody’s has placed First Bank of Nigeria Limited’s ratings on review for a possible downgrade over the dissolution of the bank’s executive board by the Central Bank of Nigeria.

“Moody’s has placed all long-term ratings and assessments of First Bank of Nigeria Limited (First Bank) on review for downgrade.

“The review will focus primarily on an assessment of evolving governance considerations at First Bank, specifically corporate governance developments,” Moody’s in a statement on Thursday said.

The credit rating agency explained that its decision to place the bank for a possible downgrade followed the dissolution of the bank’s board by CBN.

It added that the apex bank’s decision to dissolve the bank’s board exposed its shortcomings and weakness in corporate governance.

“The rating action follows the dissolution of First Bank’s board by the Central Bank of Nigeria (CBN), the bank’s primary regulator, on 29 April 2021.

“As a result of this action by the CBN, all the non-executive directors were removed while the executive management remained in place,” the rating agency said.

It added, “The review for possible downgrade reflects the rating agency’s view that the removal of all non-executive directors of the bank’s board by the regulator demonstrates corporate governance shortcomings and weaknesses in board oversight.

“The bank also needs to implement regulatory directives concerning the resolutions of loans to and shareholding in non-banking related parties, which reportedly had not been executed in the recent past.”

According to Moody’s, the developments could distract First Bank from focusing on implementing the bank’s strategic plan and the road to recovery.

Further expressing worries over the implications of the development on the bank, Moody’s said that the recent developments could potentially influence investor confidence.

Last week, CBN dissolved the bank’s management board over the sacked of its Managing Director Adesola Adeduntan.

In a statement by its chairman, Ibukun Awosika, First Bank’s board announced the retirement of Mr Adeduntan from office while announcing Gbenga Shobo as his replacement.

Subsequently, CBN Governor Godwin Emefiele announced the sacking of the entire board members and the reinstatement of Mr Adeduntan as the CEO.

The CBN then queried the First Bank’s board on the sacking of Mr Adeduntan without recourse to its supervisory role before such a weighty decision was taken.