Otedola defends N748bn bad loan write-off at First Bank

Group Chairman of First Bank Holdings, Mr Femi Otedola, has defended the company’s decision to take a one-time charge of N748bn to clear legacy bad loans, describing the move as a strategic step toward long-term stability despite its impact on reported profits.

The billionaire businessman disclosed this via his X handle on Saturday, explaining that the massive provisioning caused the holding company’s profit to decline by 92 per cent.

Otedola stated that the decision was aligned with the Central Bank of Nigeria’s directive for banks to address non-performing loans transparently rather than defer the problems.

“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 explained that the action was necessary to close the chapter on problematic loans from previous years and to restore 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 significant write-off, the First Bank chairman emphasised that the bank’s core operations remained robust, pointing to strong revenue generation as evidence of underlying financial health.

According to him, the bank recorded N2.96tn in interest income and N1.91tn in net interest income, which provided the financial capacity to absorb the cleanup while maintaining operational stability.

“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 stated.

Otedola expressed optimism about the bank’s prospects, noting that the cleanup positioned First Bank favourably for the recapitalisation exercise and future growth.

“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.