FBN Holdings Plunged as Investors Exit Positions Amidst Lawsuits

FBN Holdings Plunged as Investors Exit Positions Amidst Lawsuits

With a huge share volume traded on Tuesday, FBN Holdings Plc.’s market value plunged by about 5.5% on the Nigerian Exchange (NGX) as investors’ sentiments waned ahead of the earnings release. 

There is a mixed expectation that the ongoing debt recovery and alleged underhand deals from its connected persons would boost earnings. This has however exposed rots in the management of the bank—at least until proven otherwise by parties involved.

According to data from the local bourse, FBNH share price declined to N29.25 from N30.95 as about 13 million shares were traded in the market. FBN Holdings dipped in contrast to the ongoing re-rating banks are enjoying in the equities market ahead of earnings release.

This brought down its market value to N1.049 trillion, while its share price is trading at a significant discount of more than 33% to its 52-week high. In terms of valuation, other big banks have left FBNH behind, though its offers for subscriptions are expected to reverse the trend.

Since 2025, all tier-1 banks have seen a strong spike in their respective market valuations on the trading platform but FBNH. The oldest listed banking group in Nigeria has been tainted negatively due to internal heats that have persistently impacted its brand identity negatively, with big question marks on its reputation.

Femi Otedola, FBN Holdings chairman, has continued to reopen old wounds, calling the group past leaders and special creditors to make good past transactions. This has resulted in various lawsuits with the likes of media mogul Nduka Obaigbena, who had a sweetheart deal from the bank before Otedola’s emergence.

On FBNH request, the Federal High Court, Ikoyi, Lagos, granted an order restraining all commercial banks in Nigeria from releasing or dealing in all monies and assets up to $225.8 million due to Obaigbena from any account maintained by him.

Under Otedola, Bisi Onasanya, Oba Otudeko and immediate past CEO Adesola Adeduntan have been called out for their activities as members of the board at one point in the life of the bank. Recall that the immediate past CEO, Dr. Adeduntan, resigned from the bank abruptly in 2024 before his tenure expired.

Adeduntan‘s tenure is supposed to expire on 31 December, 2024 but he could not wait for that date as he quit to pursue other interests. But the cover up was opened when Otedola requested Folake Ani-Mumuney to resign as First Bank’s global head of marketing and corporate communications due to a lavish party for Adeduntan.

Then, details emerged that Adedunatan was reportedly forced by Otedola to resign over alleged negligence in a N60 billion electronic fraud. FBNH has also filed a lawsuit against Otudeko, and Onasanya, for alleged fraud of N12.3 billion.

Otedola himself has been tainted red following an authorised private placement, and the shareholders are now calling for ‘his head’. 

In 9M-2024 Earnings Season

FBN Holdings earnings per share surged by a 125.1% year on year at the end of the third quarter of 2024, driven by substantial increases across the group’s core and non-core income lines. The significant growth in the group’s performance was primarily driven by the elevated yields in the debt market, according to Cordros Securities Limited.

The group reported a 2.1x surge in operating income to N1.5 trillion, according to details from its unaudited financial statements. Analysts at CardinalStone Limited said in a note that the significant surge was bolstered by a stronger net interest margin and higher fair value gains on financial instruments.

The firm revised FBN Holdings gross earnings and profit after tax expectation to N3.1 trillion and N734.0 billion, respectively. They estimated a return on assets of 3.1%, up from 2.3%, and a return on equities of 31.6% from 22.6% in 2023.

Analysts said in the report that loans extended to the oil and gas sector accounted for about 49.0% of FBNH’s loan portfolio and represented 14.6% of its non-performing loans at the end of the third quarter of 2024, down from 27.3% in 2023.

“Given that loans within this sector are typically priced in foreign currency and the significant currency devaluation in 9M-2024, the moderation in the weight of oil & gas NPLs is encouraging,” CardinalStone said. #FBN Holdings Plunged as Investors Exit Positions Amidst Lawsuits FBN Holdings Records Huge Off-Market Shares Transactions