Femi Otedola, Chairman of First Bank Holdings Ltd (First HoldCo), has publicly defended the controversial N748 billion bad loan write-off taken by the banking group, insisting that the bold decision was a necessary strategic measure to strengthen the institution’s long-term stability and restore confidence in its financial footing.
In a statement posted on his X handle on Saturday, Otedola acknowledged that the one-off provisioning had a dramatic impact on First HoldCo’s reported earnings, with profit declining by 92 per cent. However, he said the painful results were a trade-off for greater transparency in tackling legacy non-performing loans.
“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,” Otedola wrote on the social platform.
Otedola said the decision was taken in line with guidelines from the Central Bank of Nigeria (CBN), which has been pushing banks to meaningfully address non-performing loans rather than defer problems to future periods.
“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.
Industry data shows that Nigerian banks, including First Bank, have been under pressure from rising loan losses over recent years, with non-performing loans exerting downward pressure on profitability across the sector.
Despite the stark headline figures, Otedola insisted that the bank’s underlying business remains resilient. According to him, First HoldCo’s core financial performance, particularly interest income, provided the capacity to absorb the one-off cleanup without undermining operations.
“The key point is this: our business itself is STILL strong. It made N2.96tn in interest income and N1.91tn in net interest income, which gave it the strength to take the cleanup and still stay standing,” he said, highlighting strong revenue streams as evidence of the bank’s financial health.
Otedola said the bad loan provisioning also positions First Bank better for the upcoming industry recapitalisation exercises and future growth phases. The banking group, Nigeria’s oldest and one of its largest, is navigating an environment where regulators have emphasised stronger capital buffers and risk management practices.
“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 = real value creation,” he concluded.
Analysts say Otedola’s remarks seek to reassure investors and stakeholders following concerns that steep provisions could erode shareholder value and dent confidence. The write-off arrives at a time when banks are bracing for heightened competition, evolving regulatory norms, and the need to deepen balance sheet resilience.
By confronting legacy loan issues now, First HoldCo’s leadership is signalling a pivot toward rigorous governance and financial disciplin, themes Otedola has championed since becoming Chairman of the group.
