Banking
Court Orders First Bank to Pay Customer N266m for Breach of Contract
By Dipo Olowookere
First Bank of Nigeria Limited has been ordered by a federal high court sitting in Ikoyi, Lagos, to pay one of its customers, Mr Olisa Agbakoba (SAN), a notable lawyer in the country, the sum of N266.4 million as general damages against the bank for mismanaging his share portfolio investment account.
The verdict of the court was as a result of a suit filed Mr Agbakoba against First Bank claiming sundry reliefs.
In his statement of claim filed before the court by a partner in the law firm of Agbakoba and Associates Babatunde Ogungbamila on behalf of the human rights lawyer, he alleged that as a result of bankers/customer relationship between him and the bank; sometime in 2008, the bank introduced its margin trading facility to him, which he accepted.
He said First Bank explained to him that the bank’s customers were to purchase shares with the advanced margin trading facility and pledge the shares to the bank.
The bank, for a management fee, was to professionally manage the advanced facility by selecting the broker and securities the facility would be invested into.
He said the bank would also prepare all the paper work needed, provide information about the funds’ holdings and performances and reserved the power to exit should the fund diminish to a threshold that could impair the economic underpinnings of the investment and left the bank’s exposure uncovered.
According to the customer, the bank claimed to possess the requisite knowledge, skills and expertise to seamlessly manage the investment in a win-win situation under terms and conditions that limited the exposure of the customers who were to rely on the expertise of the bank to manage the investment.
Consequently, the bank requested and encouraged him as a customer to take the margin loan contract.
On the strength assurance, the plaintiffs applied for a margin trading facility of N200 million with the plaintiff and the bank opening a joint special reserve lien account with the Central Securities Clearing System (CSCS), whereby First Bank Limited was the sole signatory to the lien account.
The plaintiff said he also provided shares worth N60 million as his own contribution in line with the margin trading facility agreement.
It was fundamental to the margin loan agreement that if the plaintiff was unable to regularize the account within 5 days following the margin call, the bank has the duty to sell the shares and apply the value of the shares appreciate to cover the required margin.
However, the plaintiff averred that the bank did not take reasonable care to ensure the performance of the contract and observe compliance with all terms and conditions of their agreement in relation to the transaction as the bank failed to monitor the stock market and advise the plaintiff accordingly as it was obliged by the margin loan agreement, while the value of the shares continued a steady decline the plaintiff was utterly left in the dark regarding the value of the share portfolio in spite of repeated demands by the plaintiff for information from the bank.
In a particular of the fraudulent inducement, First Bank held itself out as possessing the requisite knowledge, skills and expertise to seamlessly manage the investment in a win-win situation while offering the plaintiff the product, consequently the breach of the margin trading facility agreement, fraudulent misrepresentations and mismanagement of the plaintiff’s account by the bank occasioned huge loses to the plaintiff.
The principal sum of N200 million was completely lost, the plaintiff paid a total sum of N250,434,639.13 in liquidation of the margin loan account excluding interest and other charges.
It was disclosed that the plaintiff’s 30 percent equity contribution valued at N60 million was completely lost and N40 million out of this would have been saved if the shares were sold at the second trigger point, N768,454,85 cost of cancellation of transfer of the debt to AMCON.
During hearing of the case, Mr Agbakoba testified for himself and tendered 22 exhibits.
However, in amended statement of defence filed before the court by Professor G. Elias (SAN), First Bank, while denying almost the claims of Mr Agbakoba, contended that it is not in any way liable to the plaintiff either in contract or tort as the plaintiff was aware of the volatility of the operations of the Nigerian Stock Exchange (NSE) and the speculative nature of the price of the stocks traded thereon and voluntarily assumed the business risks involved therein by applying for the loan from the bank and applying for the loan proceeds to buy shares, thereon the bank has never been the plaintiff’s investment manager.
He said the bank’s obligations were limited to the administrative of the facility itself, not the shares. The said administration involved the bank taking steps to ensure payments of the principal sum and the interest and monitoring movements on the bank’s lien account not share account by debiting and crediting relevant accounts towards repayment of the facility.
He said the bank was never a “joint venture” participant in the shares investment business undertaken by the plaintiff with the facility proceeds.
According to him, the bank’s role in the facility transaction was that of a lender and not that of a co-investor or asset manager.
Consequently, the bank denied that it acted in breach of contract or breach of any legal duty, therefore the plaintiff is not entitled to any sum as the plaintiff’s claims against the bank are vexations and without merit and should be dismissed with substantial costs.
In his judgment, Justice Muslim Hassan held that, “I am in agreement with the submission of learned counsel for the plaintiff that the bank failed to honour its contractual obligation as contained in the margin loan agreement and as a result the plaintiff suffered damages.
“The position of the defendant is akin to a situation where a party to a contract in the absence of any agreement to the contrary takes a benefit of a contract and refuses to accept liability as a result of his inaction or negligence, no court in Nigeria would allow that.
“From the foregoing, I hold that the plaintiff has proved his case against the defendant. I hereby make the following orders.
“An order is made against the bank for the payment of N20 million as general damages against the bank for mismanagement of the plaintiffs share portfolio investment.
“An order is made against First Bank for the payment of the sum of N200 million principal sum lost by the plaintiff as a result of the bank’s breach.
“An order is made against the bank for the payment of the sum of N40 million to the plaintiff which would have been saved out of the plaintiff equity contributions were the shares sold at the second trigger point.
“An order is made against the bank for the payment of the sum N768,454,85 to the plaintiff being the cost of cancellation of transfer of the debt to AMCON.
“An order is made against the defendant for the payment of the sum of N5.6 million for loss of dividend that accrued from plaintiffs Diamond Bank shares in April 2008.
“Payment of the sum of N5 million as a cost of this action is refused as the plaintiff failed to prove how he arrived at that figure, more so the plaintiff cannot transfer his legal fees to the bank.
“An order for the payment of interest on the judgment sums awarded against the bank in favour of the plaintiffs from the date of judgement at the rate of 17 percent per annum until judgment sums are paid.”
By Adedapo Adesanya
Nigerian-born payments company, Paystack, has announced its entry into the banking sector with the launch of Paystack Microfinance Bank (Paystack MFB) after the acquisition of Ladder Microfinance Bank.
The bank continues Paystack’s push into consumer products and adds a banking layer to its business-focused payment product, coming ten years after the company was founded with the goal of simplifying payments for businesses using modern technology.
In Nigeria alone, the company says its systems process trillions of Naira every month, supporting more than 300,000 businesses and millions of customers. According to Paystack, this growth highlighted a broader need beyond payments, prompting the decision to build a more comprehensive financial offering.
Paystack MFB will begin lending to businesses before expanding to consumers. It will also offer banking-as-a-service (BaaS) products to companies building financial products and treasury management products.
The company explained that while payments are a critical part of the financial journey, businesses and individuals increasingly require a full financial operating system. This includes the ability to store money securely, move funds easily, gain clarity from financial data, and access tools that support long-term growth. Developers, Paystack added, also need reliable, secure, and compliant infrastructure to build new financial solutions efficiently.
To address these needs, Paystack said it has established Paystack Microfinance Bank as a separate and independent entity from Paystack Payments Limited.
The new microfinance bank operates with its own license, governance structure, and product roadmap, although it will work closely with its sister company.
“By adding Paystack MFB to our family of brands, we’re finding the right balance through combining the rapid innovation of a tech-first platform with the stability of traditional banking,” said Ms Amandine Lobelle, Paystack’s chief operating officer.
Last year, it launched its controversial consumer payments app Zap, and now it is taking a step further with the company securing regulatory backing to become a deposit-taking institution. According to a statement, the bank will be guided by the same principles that shaped Paystack’s early success, including reliability, simplicity, transparency, and trust.
Paystack MFB has begun operations with a small group of early members and plans a gradual rollout to more businesses and individuals. The company also announced the opening of a waitlist for interested users and confirmed it is recruiting a dedicated team to help build its long-term banking infrastructure.
By Modupe Gbadeyanka
The Economic and Financial Crimes Commission (EFCC) has helped First Bank of Nigeria to recover the sum of N802.4 million from a suspect, Mr Kingsley Eghosa Ojo, who unlawfully took possession of over N1.3 billion belonging to the bank.
The funds were handed over the financial institution by the Benin Zonal Directorate of the anti-money laundering agency on Monday, January 12, 2026, a statement on Tuesday confirmed.
First Bank approached the EFCC for the recovery of the money through a petition, claiming that the suspect received the money into his account after system glitches.
The commission in its investigation; discovered that the suspect, upon the receipt of the money, transferred a good measure of it to the bank accounts of his mother, Mrs Itohan Ojo and that of his sister, Ms Edith Okoro Osaretin, and committed part of the money to completion of his building project and the funding of a new flamboyant lifestyle.
With the recovery of the money from the identified bank accounts, the EFCC handed it over in drafts to First Bank.
While handing over the lender, the acting Director for the Directorate, Mr Sa’ad Hanafi Sa’ad, stressed his organisation would continue to discharge its mandate effectively in the overall interests of society.
“The EFCC Establishment Act empowers us to trace and recover proceeds of crime and restitute the victim. In this case, First Bank was the victim and that is exactly what we have done.
“We will continue to discharge our duties to ensure that fraudsters do not benefit from fraud and that economic and financial crimes are nipped in the bud,” he said.
In his response, the Business Manager for First Bank in Benin City, Mr Olalere Sunday Ajayi, who received the drafts on behalf of the bank, commended the EFCC for the swiftness and the professionalism it brought to bear in the handling of the matter and expressed the bank’s gratitude to the commission.
He described the EFCC as one of Nigeria’s most effective and reliable institutions.
Meanwhile, Mr Kingsley and all other suspects in the matter have been charged to court for stealing by the EFCC.
By Henry Obiekea
Nigeria is at a defining moment in 2026. After several years of bold macroeconomic adjustments, including foreign exchange unification and structural reforms, the country is moving from stabilization into expansion. With the Central Bank of Nigeria restoring confidence in the Naira and foreign reserves reaching a five-year high of over 45 billion dollars, the next phase of growth will be shaped by how effectively Nigerians can participate in the formal financial system.
Technology-enabled banking is playing a critical role in this transition. Commercial banks remain the backbone of the system, providing balance sheet strength, regulatory depth, and long-term capital essential for national development. Yet in a country of over 220 million people, physical access alone cannot deliver financial inclusion at scale.
Mobile-first and digitally delivered financial services are bridging this gap. By extending regulated banking beyond physical locations into everyday devices, licensed microfinance banks and other regulated institutions are bringing millions of Nigerians into the formal economy. This approach helped push formal financial inclusion to over 64 percent in 2025, ensuring the last mile is no longer excluded.
Achieving the Federal Government’s target of a one trillion dollar GDP by 2036 requires efficient capital flow. In the first quarter of 2025 alone, Nigeria recorded over 295 trillion naira in electronic payment transactions. Faster, secure financial infrastructure supports modern commerce, strengthens trade, and improves overall economic productivity.
Micro, small, and medium-scale enterprises, which contribute nearly 48 percent of GDP, are central to this growth. Technology-driven banking models are helping to close long-standing credit gaps. By responsibly using alternative data to assess risk, small-ticket working capital loans provide the “pocket capital” businesses need to grow. This builds a pipeline of enterprises that can mature into larger corporate clients within the broader banking ecosystem.
Digitally delivered financial services also strengthen public revenue mobilisation. Increased transaction transparency supports a broader tax net and contributes directly to government revenues through stamp duty, reinforcing fiscal sustainability.
This evolution is supported by a maturing regulatory environment. The Central Bank of Nigeria’s Open Banking framework, rolling out in phases from early 2026, ensures that all regulated institutions operate under consistent oversight. Secure data sharing standards mean customers’ financial histories can move with them across institutions, strengthening trust and accountability.
At FairMoney Microfinance Bank, we see this framework as a social contract. Knowing that deposits are protected by NDIC insurance and supported by clear dispute resolution mechanisms gives customers the confidence to participate actively in the economy.
The future of Nigerian banking is defined by structural harmony. Traditional banks provide depth and stability, while technology-enabled institutions provide reach, speed, and accessibility. Together, they turn financial access into economic resilience.
By working in alignment, we can ensure every Nigerian, from the Lagos professional to the rural trader, is equipped to contribute meaningfully to our shared one trillion dollar future.
Henry Obiekea is the Managing Director of FairMoney Microfinance Bank
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