A former bank chairman called me after reading my last article on this matter.
“Edgar, what I can say for you is that you are very loyal to your friends and that is good.”
In the said article, I had waxed very optimistic about the immediate future of First Bank after they had taken the full hit with the forbearance.
Mr. Otedola had led the board to take in one fell swoop over ₦900b in bad loans, leaving them with about a 92% drop in profits.
The former chairman, an extremely brilliant player with very strong pedigree, had taken me through the technicals of an investment with First Bank at this time.
“Edgar, that is poor journalism. You are asking people to buy First Bank at this time.
The P/E ratio isn’t right and the price at about ₦50 is too expensive.”
He ended by saying, “I expect a 10% drop in share price by Monday and from there it should settle at about ₦25. Then it would be a brilliant buy at that price.”
I didn’t agree but I didn’t argue or tell him. I said, “Oh, you made a point.” He said, “You should retract,” and I said, “Yes sir.”
I was not going to retract anything. All my stockbroking career, I have always been behavioral in my approach.
This saved my career.
I read Political Science and cannot do maths to save my life. In fact, I got P7 in WAEC, so to bridge this I was more humanist.
I looked at investor behaviour, studied trends and linked it up to basic share pricing and voila, I could take a stand.
Another thing I bet on was quality of management and board.
Once I see the board, I will tell my clients run away. I don’t care what the technicals are, just run.
For others, I will say sit. Ride and die. A board with, say for example, Aig-Imoukhuede, I will say BUY long and ride.
So this First Bank thing — I placed my bet on Femi Otedola for the reasons I have mentioned in previous articles but will mention a bit.
A bank that bites the bullet in this way is a courageous bank.
Although the matter is regulatory-driven, others took it in phases, but these people just took it once and for all and went home to sleep.
This sends a fight-or-die-trying attitude which will augur well for the long-term player.
Now after that conversation, I made it a point of duty to track the share price of First Bank.
I personally went to another resurging brand — BGL. You didn’t know they are back?
I met with a very brilliant stockbroker who gave me the information I needed.
First Bank sold at ₦49 on Jan 26th, around the time the announcement was made.
By Friday that week, it dropped to ₦47 and truly as mentioned by my former bank chairman friend, it closed on Monday Feb 2nd at ₦41.05, dropping the full maximum allowed in a trading day.
But wait sir, before you swig the champagne, by Tuesday it had climbed back to ₦44.15, gaining 10% and closing full bid — full bid is when demand for a share price is higher than what is available for sale.
The brilliant broker who was talking to me amidst a flurry of activities as occasioned by the deluge of clients’ calls making enquiries on how they can reopen their accounts with BGL, made a prediction that he was seeing that price hit ₦47 by close of the week.
Now this trade behaviour shows the sturdiness of the bank and its shares.
An entity that has been hit by over ₦2 trillion in bad loans and still pushing like this with confident arrogance can only be a safe bet for a long-term investor.
Mr. Otedola’s decision to ramp up his holdings from 11% to 18.2% tells me two things:
His confidence in the ship is super stable and secondly, he needs all the powers of the largest shareholder to push through all the reforms he needs to give this Elephant back its erection.
What does all this mean for the investor?
Nothing but a huge BUY signal in a bid to ride through this storm for later massive gains.
Let me conclude by categorically and confidently encouraging you to BUY the shares and if it bites you, COME AND BEAT ME.
Thanks.
Duke of Shomolu
Last modified: February 3, 2026
