Femi Otedola, Group Chairman of First Bank Holdings (First HoldCo), has clarified the reasoning behind the company’s decision to write off ₦748 billion in legacy non-performing loans, saying the move was intended to reset the bank’s balance sheet and strengthen confidence in its long-term outlook.
In a post on his X handle on Saturday, Otedola acknowledged that the one-off provisioning resulted in a 92 per cent decline in reported profit, but maintained that the action was both deliberate and consistent with the Central Bank of Nigeria’s (CBN) push for greater transparency in the treatment of bad loans.
He explained that rather than defer the burden of problematic assets, the bank opted to confront them head-on.
“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 looks like it crashed by 92 per cent. Painful headline, but it is a serious long-term move,” he wrote.
Otedola said the decision effectively closed the chapter on legacy exposures and underscored the importance of accountability in lending practices.
“Why do this now? Because the CBN is pushing banks to stop kicking problems down the road. So First HoldCo basically 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 charge, Otedola stressed that the bank’s fundamentals remain intact. He revealed that First Bank posted ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, indicating the strength of its revenue base.
According to him, this earnings capacity allowed the institution to absorb the clean-up exercise without compromising operational stability.
“The key point is this: our business itself is still strong. It made ₦2.96tn in interest income and ₦1.91tn in net interest income, which gave it the strength to take the clean-up and still stay standing,” he said.
He expressed optimism that the decisive action would leave First Bank better prepared for the industry’s recapitalisation phase and future expansion.
“Now at First Bank and beyond, we go into 2026 lighter, cleaner and better prepared for the recapitalisation era and serious growth. Bad loans cleared, strong income engine, long-term thinking equals real value creation,” Otedola stated.
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