By Obinna Uballa
Femi Otedola, Group Chairman of First Bank Holdings (First HoldCo), has defended the company’s decision to take a one-off charge of N748 billion to clear legacy non-performing loans, describing the move as a deliberate strategy to strengthen the bank’s long-term stability despite a sharp hit to reported profits.
Otedola disclosed this on Saturday via his X handle, explaining that the heavy provisioning was responsible for a 92 per cent decline in the holding company’s profit.
According to him, the decision was in line with the Central Bank of Nigeria’s (CBN) directive urging banks to address non-performing loans transparently rather than defer the problems into future financial years.
“At First HoldCo we decided to clean house properly. We took a huge one-time hit of N748bn 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.
He said the write-off was aimed at closing the chapter on problematic loans accumulated over the years and restoring stakeholder confidence in the institution.
“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, which sends a clear message that borrowing has consequences and it helps rebuild trust,” Otedola added.
Despite the substantial provisioning, Otedola stressed that the bank’s core operations remain strong, pointing to its robust earnings capacity as evidence of underlying financial health.
He revealed that First Bank recorded N2.96 trillion in interest income and N1.91 trillion in net interest income, which enabled it to absorb the clean-up exercise without jeopardising operational stability.
“The key point is this: our business itself is still strong. It made N2.96tn in interest income and 1.91tn in net interest income, which gave it the strength to take the cleanup and still stay standing,” he stated.
Otedola expressed optimism that the decisive action would place the bank in a stronger position ahead of the industry recapitalisation drive 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, and long-term thinking equal real value creation,” he concluded.
