Group Chairman of First Bank Holdings, Femi Otedola, has defended the company’s decision to write off ₦748 billion in legacy non-performing loans, describing it as a calculated step to secure the bank’s long-term financial health despite its immediate impact on profits.
In a post on his X handle on Saturday, January 31, Otedola said the extensive provisioning exercise led to a 92% drop in reported profit for the group.
“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 explained that the decision was in line with the Central Bank of Nigeria’s (CBN) directive urging banks to confront bad loans directly rather than defer the problem.
“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,” he added.
According to the billionaire investor, the move was necessary to finally deal with problematic loans accumulated over several years.
He said the clean-up would help restore confidence among investors, regulators, and other stakeholders, while reinforcing the bank’s credibility in the financial sector.
The write-off, though painful in the short term, is expected to strengthen First Bank Holdings’ balance sheet and position it for sustainable growth in the future.
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