Chairman of First Bank Holdings, Femi Otedola, has justified the bank’s decision to write off ₦748 billion in non-performing loans, describing it as a deliberate and necessary move to secure the institution’s future, even though it sharply reduced reported profits.
Otedola revealed in a post on his official X (formerly Twitter) account that the one-off provisioning led to a 92 per cent drop in the group’s profit, but insisted the decision was in line with regulatory expectations and sound corporate governance.
According to him, First HoldCo chose to confront legacy bad loans head-on rather than continue postponing the problem.
“At First HoldCo, we decided to clean house properly. We took a major one-time charge of ₦748bn to recognise old bad loans instead of acting as if they didn’t exist. That is why profits appear to have fallen by 92%. It’s a painful headline, but it’s the right long-term decision,” he stated.
He explained that the move was influenced by the Central Bank of Nigeria’s push for transparency and accountability in the banking sector, especially regarding non-performing loans.
Otedola said clearing the inherited loan issues from past years sends a strong signal to the market that the bank is committed to discipline, responsibility, and rebuilding trust among investors and customers.
Despite the heavy write-off, the billionaire businessman stressed that First Bank’s core business remains solid. He disclosed that the bank generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, providing enough strength to absorb the losses without destabilising operations.
“The most important thing to understand is that the business itself remains very strong. Those earnings gave us the capacity to take this hit and still remain stable,” he noted.
Looking ahead, Otedola expressed confidence that the cleanup places First Bank in a stronger position as the banking sector prepares for recapitalisation and future expansion.
“Going into 2026, First Bank is lighter, cleaner, and better prepared for the recapitalisation era and sustained growth. Clearing bad loans, backed by a strong income engine and long-term thinking, is how real value is created,” he concluded.