The Group Chairman of First Bank Holdings Plc, Mr Femi Otedola, has defended the company’s decision to take a one-off charge of ₦748bn to clean up legacy bad loans, describing the move as a necessary step to strengthen the institution’s long-term stability.
Otedola disclosed this in a post on his verified X handle on Saturday, explaining that the heavy provisioning caused the holding company’s profit to drop by 92 per cent.
According to him, the decision was in line with the Central Bank of Nigeria’s directive for banks to address non-performing loans transparently rather than defer the problem.
At First HoldCo, we decided to clean house properly. We took a huge one-time hit of ₦748bn to admit old bad loans instead of pretending they do not exist.
That is why profit appears to have crashed by 92 per cent. It’s a painful headline, but it is a serious long-term move, Otedola wrote.
He said the write-off was aimed at closing the chapter on problematic loans accumulated in previous years and restoring confidence among stakeholders.
“Why do this now? Because the CBN is pushing banks to stop kicking problems down the road. First HoldCo has effectively closed the chapter on messy loans from past years.
This sends a clear message that borrowing has consequences and helps rebuild trust, he added.
Despite the substantial write-off, Otedola maintained that the bank’s core business remained strong, noting that its revenue performance showed underlying financial resilience.
He revealed that the bank recorded ₦2.96tn in interest income and ₦1.91tn in net interest income, providing enough capacity to absorb the clean-up while sustaining operations.
“The key point is this: our business is still strong. It generated ₦2.96tn in interest income and ₦1.91tn in net interest income, which gave it the strength to absorb the clean-up and remain standing, he stated.
Otedola expressed optimism about the bank’s outlook, saying the clean-up had positioned First Bank for the ongoing recapitalization exercise and future growth.
Now, at First Bank and beyond, we go into 2026 lighter, cleaner and better prepared for the recapitalization era and serious growth. Bad loans cleared, strong income engine, and long-term thinking equal real value creation,” he said.
