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FBNH: Unpacking a Board Resignation and the Role of Regulatory Oversight

Dec 25, 2021   •   by Proshare Research   •   Source: Proshare   •   eye-icon 345 views

On Friday, December 17, 2021, Nigeria’s financial media was shocked by the announcement of the resignation of FBN Holdings Board Chairman, Mr. Remi Babalola. The news filtered in during the evening as stockbrokers had just ended the heated passion of trading, and market operators had hoped that they had closed the best preholiday market deals of the year. The Nigerian Exchange (NGX) All Shares Index (ASI) was oblivious of the news of Babalola’s resignation and closed at 42,353.31 or rose by +0.2%. In comparison,

FBNH shares masked the gravity of the group Chairman’s decision and rose by +0.42% to N12.05. The market’s calm indifference was understandable as Nigeria’s premier financial Holdco’s board change was a developing story newly announced and unassimilated.

However, in a swift response to the group Chairman’s resignation, the Central Bank of Nigeria (CBN) replaced Mr. Babalola with Mr. Ahmad Abdullahi, a one-time Director of Banking Supervision of the CBN and current board member of the African Finance Corporation (AFC).


Abdullahi’s emergence as the Chairman of FBNH’s board of directors was not particularly problematic given his broad regulatory knowledge. However, the former regulator's private sector inexperience and past regulatory antecedents (CBN and the Nigerian Deposit Insurance Corporation (NDIC)) would appear to make his appointment one of convenience rather than strategy. Abdullahi’s regulatory background created the semblance of another CBN boot in the doorway and hands on the rudder, leaving analysts to wonder about the true extent of control/intentions of the banking system supervisor over FBNH. For example, does Abdullahi’s appointment amplify the CBN’s concept and application of its ‘forbearance’? Does it mean that the regulator (by proxy) and not shareholders through their nominated board now provides Nigeria’s oldest bank with strategic and operational guidance?

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