Otedola’s expanding footprint in First HoldCo fuels conversation

By Chukwuma Umeorah

Femi Otedola’s latest acquisition of shares in First HoldCo Plc has pushed his stake in the financial institution close to 20 per cent, placing him among the most influential individual shareholders in Nigeria’s banking industry and reviving debate over how much influence a single investor should wield in a systemically important bank.

The increase comes at a time when ownership structures across Nigeria’s banking sector remain largely fragmented, a model that emerged after post-2009 banking reforms aimed at reducing excessive insider dominance, strengthening corporate governance standards and limiting concentration of power within financial institutions.

Market disclosures show that Otedola, through related entities, now holds roughly 19.3 per cent of First HoldCo, owner of First Bank of Nigeria. On May 13, 2026, Otedola, acting through Calvados Global Services Limited, purchased 549,535,653 ordinary shares of First HoldCo at N79 per share in a single trading session on the Nigerian Exchange (NGX). The transaction, valued at approximately N43.41 billion ranks among the largest single-day investments by any individual in the history of the NGX. It lifted his combined direct and indirect stake from 8.055 billion shares, or 18.12 per cent, to approximately 8.604 billion shares, or 19.36 per cent of the company’s issued capital. Based on publicly available data, this position makes him one of the largest individual shareholders in any tier-one Nigerian bank, although RC Investment Management Limited is still understood to hold a larger bloc.

Although Otedola remains far from majority ownership, governance specialists say a shareholder with close to one-fifth of a bank’s equity could still wield substantial influence.

The Chief Executive Officer of Cowry Asset Management Limited, Johnson Chukwu, argued that the existence of influential core investors in banks has not, in itself, translated into governance failures or operational instability within the financial system.

“In almost all the major banks, we have those use cases replicated, and it has not in any way jeopardised efficient operations,” he said.

According to him, the critical issue is not necessarily the numerical size of a shareholder’s stake, but whether the leadership and ownership structure of a bank adheres to established corporate governance standards.

“What matters is that you have leadership and ownership that want to adhere to good corporate governance standards and that are not overbearing or unduly negatively influential,” he said.

“If they are positively influential, then it even becomes beneficial to the bank,” he added.

Chukwu also dismissed suggestions that a 20 per cent holding alone automatically translates into control of a bank, noting that substantial minority interests, independent directors and broader board structures remain important counterweights within regulated financial institutions.

“There is still 80 per cent shareholding outside that structure, and there are minority interests. The constitution of the board also includes independent directors,” he said.

On his part, Chairman of Highcap Securities, David Adonri, said that while a near-20 per cent stake in a systemically important financial institution could attract regulatory and investor scrutiny, Otedola’s growing influence at First HoldCo has so far coincided with increased investor confidence in the company.

According to him, the sustained acquisition of shares by the businessman has strengthened market perception about the bank’s prospects and contributed to rising shareholder value.

“He continues to inject more capital and confidence into the institution through his increasing stake. The market has responded positively, and shareholders have benefited from the appreciation in the share price,” Adonri said.

He added that investors typically evaluate such developments from the standpoint of returns and market performance, particularly in an environment where banking stocks remain attractive to both institutional and retail investors. “For many investors, what matters is whether the company is creating value. Those who remain invested benefit from the upside in the stock, while those who decide to exit are also able to realise gains,” he said.

Adonri, however, noted that some analysts and market participants may still view increasing ownership concentration in a major bank as a governance concern, especially within a sector considered critical to financial system stability.

According to him, concerns about excessive influence are not unusual whenever a dominant shareholder begins to emerge within a regulated financial institution.

He explained, however, that retail investors in the Nigerian market often respond more to earnings performance, dividend prospects and share price momentum than to underlying ownership concentration concerns. “The average retail investor have the herd mentality. They tend to follow market direction and sentiment. If they see strong performance and sustained value creation, they are likely to remain invested regardless of who the dominant shareholder is,” he said.

Typically in Nigeria, sectors such as manufacturing and industrial companies listed on the Nigerian Exchange have long operated under concentrated ownership structures, with founders and promoter groups retaining substantial control over strategic direction and corporate decision-making. Within the banking sector, however, ownership has historically remained relatively dispersed because of stricter regulatory oversight and the systemic importance of financial institutions.

In companies such as Dangote Cement Plc, billionaire businessman Aliko Dangote controls over 80 per cent stake through related entities, giving him overwhelming influence over corporate policy and governance decisions. Similar ownership concentration exists in other non-banking sectors, including BUA Cement Plc and BUA Foods Plc, where founder-linked holdings associated with Abdul Samad Rabiu remain dominant.

By contrast, most tier-one Nigerian banks, including Zenith Bank Plc, Guaranty Trust Holding Company Plc, Access Holdings Plc and United Bank for Africa Plc, have historically maintained broader institutional and retail shareholder structures, even where influential founders, chairmen or strategic investors continue to play significant roles in shaping corporate direction.