Bank Board Dissolution: Analysts Seek Clarity As Customers Panic

Following the dissolution of the board and management of Union Bank, Polaris Bank and Keystone Bank, analysts and market watchers have said, there is need for more clarity on the structure even as customers panic over what would become the fate of their funds in the wake of the shake up.

The CBN had, on Wednesday, announced the dissolution of the board and management of the three banks for violation of parts of the Banks and Other Financial institutions Act (BOFIA). This is coming on the heels of the recommendation of the presidential investigator, which had asked that the sale of the banks be revoked as they did not follow due process.

According to the statement issued by the CBN, the action had become necessary due to the non-compliance of the banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act, 2020.

Section 12 of the Banks and Other Financial Institutions Act (BOFIA) states that “notwithstanding the provisions of this act or any other law, the governor may with the approval of the board and by notice published in the federal government gazette or print and electronic media revoke any licence granted under this act.

Section 12(c) “fail to fulfil or comply with any conditions subject to which the licence was granted. Section 12(f) “is involved in a situation circumstance action or inaction which constitutes a threat to financial stability” 12(g) “fails to comply with any obligation imposed upon it by or under this act or the CBN act or any other rule regulations guideline or directive made hereunder” 12(h) “is in the opinion of the bank critically undercapitalized with a capital adequacy ratio below the prudential minimum or such other ratio as the bank may prescribe.”

Speaking with LEADERSHIP, the head, Financial Institutions at Agusto & Co, Ayokunle Olubunmi, noted that, “the statement by the CBN was careful and did not say anything about the shareholders but only discussed the management and the board which calls for more explanation.”

Some customers, who spoke with LEADERSHIP said, they have been confused with the news as they do not know the fate of the banks and their funds in the bank. A customer who claimed to have heard over the radio that his bank has been taken over by the CBN, said he plans to move the funds in his Union Bank account to another bank as he does not know what would happen thereafter.

Another customer, who uses Keystone bank said, while she had been having issues with refunds of failed transactions, the latest development shows that the bank was going under and she would be withdrawing her funds from the bank.

Olubunmi, who was earlier calling for more clarity from the apex bank said: “if the CBN is taking over the ownership of the banks, it is advisable that they dispose now or hand it over to a new investor as fast as possible. We should note that the CBN did not say it has revoked their licence, it did not say that it has taken over the ownership.

“It only took over the board and management. It might look similar to what happened with FirstBank where they dissolved the board but it didn’t affect the shareholders. So the CBN needs to clarify what it is doing with this one, is it just changing the board and management or changing the ownership.”

Managing director, Forthright Securities & Investments Limited, Charles Egbunonwo, while commenting on the issue said: “looking at the case itself, and the regulators or investigators induced action, one would say as long as the action was taken in the best interest of the shareholders and those who are involved it is okay.

“There is a process of taking over a bank or acquiring a bank and if a regulator believes that some of those processes were not followed through and they are taking this decision then it is fine, because the financial service industry need to follow laid down  principle of good corporate governance  and if the investigators and regulators believe that some of those processes were  not followed and they took this action then it is okay.”

A senior stockbroker , Mr Tunde Oyediran said, the other banks that are quoted on the Exchange will now know that the present management of CBN will not tolerate non-performance, explaining that, “CBN will not support the practices that will be fraudulent in nature or that will not make the industry perform well.”

Oyediran added that the banks will be more careful now and this is why companies like Unity Bank have to sit up. He also said, this is a signal to the banking industry that the Caduceus government of CBN will not condone non-performance and unethical  spending and practices.

Meanwhile, banking stocks, yesterday, at the Nigerian capital market remained unfazed in the wake of the dissolution of the boards of Union Bank, Polaris Bank and Keystone Banks, as stockbrokers said the market is still watching the unfolding of events.

At the end of trading on Thursday, almost all the banking stocks continued with the bullish rally which they have been on with only Unity Bank recording a 1.95 per cent depreciation in its share price.

According to the managing director, Forthright Securities & Investments Limited, Charles Egbunonwo, the market is yet to react to the news considering that the affected banks are not listed on the exchange.

Noting that the information is still fresh and it is an ongoing story, he said:  “looking at the case itself, and the regulators or investigators induced action, one would say as long as the action was taken in the best interest of the shareholders and those who are involved it is okay.

“There is a process  of taking over a bank or acquiring a bank and if a regulator believes that some of those processes were not followed through and they are taking this decision then it is fine, because the financial service industry need to follow laid down  principle of good corporate governance  and if the investigators and regulators believe that some of those processes were  not followed and they took this action then it is okay.”

…Oni, Imam, Akintola: Meet New MDs Of Union, Keystone, Polaris Banks

After dissolving the board and management of Polaris, Union, and Keystone banks, the Central Bank of Nigeria (CBN) has appointed new chief executives and executive directors to oversee the affairs of the banks.

The apex bank, in a statement by the acting director of Corporate Communications, Hakama Sidi Ali, earlier today, said the appointment takes immediate effect. According to the statement, Yetunde Oni was appointed as the chief executive officer of Union Bank, while Mannir Ubali Ringim was selected as the executive director of the bank.

For Keystone Bank, Hassan Imam was appointed as its Chief executive officer, while Chioma Mang got the position of executive director. CBN equally appointed Lawal Mudathir Omokayode Akintola as the chief executive officer of Polaris Bank and Chris Ofikulu as its executive director.

Yetunde Oni was the first female CEO of the Standard Chartered Bank in Sierra Leone and she replaced Mudassir Amray who was the former CEO of the bank. As the new chief executive officer and MD of Union Bank, Yetunde Oni brings her wealth of experience in the banking industry which spans over 25 years.

Yetunde Oni bagged a degree in Economics from the University of Ibadan in 1991, she underwent Executive Training at Oxford University in 2016, even as she obtained an MBA in Business Administration from Bangor University in 2020.

She began her career with Prime Merchant Bank Treasury & Money Markets Group and in 1994, she joined Ecobank Nigeria as a Relationship Manager in the Institutional Banking Group (1994 – 2005).

In January 2005, Yetunde Oni joined Standard Chartered Bank Nigeria, assuming the role of Senior Account Relationship Manager in the Local corporations segment, while she was later transferred to the Apapa Branch where she was saddled with the dual responsibility of Wholesale Banking Branch Head and the development of the Bank’s Local corporate portfolio in the Apapa and Ogun State Region.

In May 2010, she was appointed Head of Local Corporates and in 2014, she was appointed the Managing Director & Country Head of Commercial Banking in West Africa for Standard Chartered Bank, (2014 – Jan 2021).

Before her Managerial appointment with Union Bank, she operated as the first female Managing Director and Chief Executive Officer at Standard Chartered Bank in Sierra Leone, a position she took in January 2021.

Meanwhile, Hassan  Imam takes over leadership of the Keystone Bank from Olaniran Olayinka, who served as CEO from March 2020 until the CBN dissolved the boards of Keystone Bank and two other banks yesterday. With over 25 years of banking experience, Imam has held various executive roles during his career.

Prior to his appointment as CEO, Imam served as Executive Director for the North Region at Fidelity Bank since January 2020. In that position, he was responsible for Fidelity Bank’s commercial, SME, consumer, and public sector business in 19 Northern Nigerian states, including Abuja. Imam joined FSB International Bank in 1998 before it merged with Fidelity Bank in 2005.

Over the years, he took on various leadership positions at Fidelity across commercial banking, consumer banking, SME and risk management. The new Keystone Bank CEO rose from general manager to a role on the Board of Directors during his long career at Fidelity.

On the other hand, Lawal Mudathir Omokayode Akintola was appointed by CBN to head Polaris Bank as chief executive officer. Before this appointment, Akintola was the managing director/ chief executive officer of Fractional Investment Services Limited, a real estate company in Nigeria.

He also held the position of executive director of corporate and investment banking at Sterling Bank Plc before setting up Intermediate Equity Partners Limited. He has over 30 years of experience in the banking industry, with insight into key sectors like oil and gas, telecommunications, manufacturing, and other infrastructural projects.