Chaiirman, First Bank of Nigeria PLC, Mr. Oba Otudeko and three non-executive directors retired from the bank yesterday. Otudeko’s retirement came after he replaced Dr. Umaru Mutallab

The three directors are Alhaji Abdullahi Mahmood, General Garba Duba (Rtd.), and Mr. Oye Hassan-Odukale. Their retirement was announced by the Group Managing Director/Chief Executive of the Bank, Mr. Bisi Onasanya via an internal memo to employees of the bank.

The Board also appointed Ibrahim Dahiru Waziri; Tunde Hassan-Odukale (his family owns majority shares in Leadway Insurance); Khadijah Alao Straub; and Obafemi Adedamola Otudeko as Non-Executive Directors.

In the memo titled,  “Board Leadership Transitions,”  Otudeko said, “In line with the Bank’s long-standing commitment to best-of-breed corporate governance practice, especially our commitment to continuity and a constant rejuvenation of the Board of Directors, and consistent with the provisions of the relevant sections of the Central Bank of Nigeria’s Code of Corporate Governance for Banks, I wish to inform you of the retirement of the Chairman, Dr. Ayoola Oba Otudeko from the Board effective December 31 2010.

Along with the Chairman, three other Non-Executive Directors, Alhaji Abdullahi Mahmood, General Garba Duba (Rtd.), and Mr. Oye Hassan-Odukale also retired their appointments from the Board effective December 31 2010.

At a meeting of the Board of Directors held yesterday, and where these retirements were announced, the Board underlined its emphasis for continuity by appointing Prince Ajibola Afonja, previously a Non-Executive Director, as Chairman with effect from January 1 2011. The Board also appointed the following new Non-Executive Directors: Ibrahim Dahiru Waziri; Tunde Hassan-Odukale; Khadijah Alao Straub; and Obafemi Adedamola Otudeko.

Meanwhile, the Board has accepted Dr. Yerima Ngama’s resignation from the Board with effect from December 31 2010 in order to pursue newer challenges. Bello Mohammed Maccido was appointed an Executive Director in place of Dr Ngama with effect from January 1 2011.

Please join me in wishing the Chairman and other departing members of the Board of Directors the best in every new field of endeavour that they might desire to turn their immense skills to. And to welcome the new members of the Board with our excellent traditions of cooperation and hospitality.”

It would be recalled that year 2010 began for the sector with target examinations by the Central Bank of Nigeria (CBN) and the Nigerian Deposit Insurance Corporation (NDIC), which revealed a lot of rot and shortcomings in the sector.

Following signs of distress in some MFBs and growing complaints of fraudulent practices leveled against some operators, the CBN and NDIC thought it wise to conduct target examination of the banks so as to ascertain the true financial health of the banks. Dr. Kingsley Moghalu, CBN’s Deputy Governor (Financial Sector Stability), said “We have embarked on a comprehensive target examination of all MFBs and the result of this examination will form the basis of detailed policy guidelines of the MFB sector to be released later.”

The results of the target examination revealed that all was not well in the sector as evidenced by the irregularities and unethical practices became the order of the day.

Worried by the results, the CBN organized a certification examination programme for MDs and management staff of MFBs so as to build capacity in the sector as most operators in the sector are from different background with various degrees.

Speaking on the necessity of the programme, the CBN said “Capacity building is one of the things that are required in the MFB sector because we need to have a critical mass of knowledgeable and skilled personnel that would drive the sector.

“This is as a result of the present situation we have in which MFB operators are from different backgrounds and have various degrees. As a result, most of them don’t understand the concept of microfinancing, which is responsible for their operating like commercial banks and this is not helping the sector.”

On September 24, 2010, the CBN’s sledge hammer fell on the sector, resulting in the revocation of the operating licenses of 224 MFBs found to be ‘terminally distressed’ and ‘technically insolvent’.

Attributing this to the impact of the global financial crisis, Moghalu said MFBs had been more hit than anticipated as credit lines dried up, competition became more intense and credit risk increased while many customers of MFBs were unable to pay back their credit facilities owing to the hostile economic environment.

All these seems to have gone with 2010 as both the regulatory bodies and operators are optimistic that 2011 will produce more effective and well focused MFBs that will concentrate on their core functions.