Femi Otedola says First HoldCo’s ₦748bn bad loan write-off is a deliberate clean-up, not weakness, despite a 92% profit crash
Otedola Defends ₦748bn Bad Loan Write-Off at First HoldCo, Says It’s a Long-Term Reset
Billionaire businessman and Chairman of First HoldCo Plc, the parent company of First Bank of Nigeria, Femi Otedola, has defended the group’s decision to absorb a massive ₦748 billion one-time loss from legacy bad loans, describing it as a strategic clean-up rather than a sign of operational weakness.
The move resulted in a 92 per cent plunge in profit, triggering widespread attention and concern across the financial market.
However, Otedola, in a statement posted on his verified X (formerly Twitter) handle on Saturday, said the decision was deliberate and aimed at restoring long-term stability and credibility.
“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%. Painful headline, but it is a serious long-term move,” he wrote.
According to him, the losses were one-off, arising from the formal recognition of non-performing loans accumulated over several years, rather than from ongoing business activities.
Otedola explained that the clean-up aligns squarely with the Central Bank of Nigeria’s (CBN) directive urging banks to strengthen their balance sheets, particularly as the sector enters a critical recapitalisation phase.
“Because the @cenbank 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 stated.
Despite the headline-grabbing loss, Otedola stressed that the group’s core banking operations remain robust, revealing that First HoldCo generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, figures he said underscore the institution’s capacity to absorb the financial shock.
Market analysts believe the move could significantly improve transparency, investor confidence, and regulatory standing, positioning the banking group for sustainable growth in the post-recapitalisation era.
The development comes amid heightened scrutiny of Nigerian banks as regulators intensify efforts to clean up balance sheets and prevent the buildup of hidden financial risks across the sector. Read More
