Billionaire businessman and Chairman of First HoldCo Plc, the parent company of First Bank of Nigeria, Mr. Femi Otedola, has defended the group’s decision to absorb a one-time loss of ₦748 billion from old non-performing loans, describing the move as a deliberate clean-up rather than a sign of operational weakness.
Otedola made the clarification in a post on his X handle on Saturday, following concerns over the sharp decline in the group’s profitability.
“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.
The write-off resulted in a 92 per cent drop in the group’s profit for the period. However, Otedola explained that the losses were one-off in nature and stemmed from the recognition of long-standing bad loans accumulated over previous years.
According to him, the decision aligns with the Central Bank of Nigeria’s directive urging banks to strengthen their balance sheets and stop deferring the recognition of impaired assets, especially ahead of the ongoing banking sector recapitalisation exercise.
“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,” Otedola said.
Despite the significant write-off, he maintained that the group’s core business remains solid and resilient. He disclosed that First HoldCo generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, providing sufficient capacity to absorb the impact of the loss.
According to Otedola, the clean-up is expected to improve transparency, restore investor and public confidence, and position the financial group for sustainable long-term growth.
