The Central Bank of Nigeria has queried the First Bank of Nigeria board for removing Adesola Adeduntan, the Managing Director/Chief Executive Officer, without regulatory approval.

“Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5:00 p.m. on April 29, 2021,” said the query.

The query was contained in a letter dated April 28, 2021, signed by the CBN Director of Banking Supervision, Haruna Mustafa, and addressed to the bank’s Chairman, Ibukun Awosika.

Mr Mustafa said, “The CBN was not made aware of any report from the board indicting the managing director of any wrongdoing or misconduct; there appears to be no apparent justification for the precipitate removal.

“We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank, which has enhanced its asset quality, capital adequacy, and liquidity ratios amongst other prudential indicators.”

The letter added, “It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiration of his second tenure, which is due on December 31, 2021.” 

The CBN director noted that removing a sitting MD/CEO of a “systemically important” bank was not good.

He explained further, “The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for five to six years without prior consultation and justifiable basis has dire implications for the bank and also portends significant risks to the stability of the financial system.

“In light of the foregoing, you are required to explain why disciplinary action should not be taken against the board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.”

First Bank on Wednesday announced Gbenga Shobo as the new MD.