OTEDOLA DEFENDS ₦748BN BAD LOAN WRITE-OFF, SAYS MOVE STRENGTHENS FIRST BANK FOR LONG-TERM GROWTH

OTEDOLA DEFENDS ₦748BN BAD LOAN WRITE-OFF, SAYS MOVE STRENGTHENS FIRST BANK FOR LONG-TERM GROWTH


The Group Chairman of First Bank Holdings Plc, Mr. Femi Otedola, has defended the company’s decision to write off ₦748 billion in legacy non-performing loans, describing the move as a necessary and strategic step to strengthen the bank’s long-term stability and restore confidence in its financial position.

Otedola disclosed this in a statement shared via his official X (formerly Twitter) account on Saturday, explaining that the one-time provisioning significantly affected the group’s reported earnings, leading to a 92 per cent decline in profit for the period.

According to him, the decision was in line with the Central Bank of Nigeria’s (CBN) directive urging banks to address non-performing loans transparently rather than postponing or masking financial risks.

“At First HoldCo, we chose to clean house properly. We took a one-time hit of ₦748bn to recognise old bad loans instead of pretending they do not exist. That is why profits appeared to drop sharply. It may be a painful headline, but it is a serious long-term decision,” Otedola stated.

He explained that the write-off was aimed at closing the chapter on problematic loans accumulated over previous years, adding that the move sends a strong signal to borrowers and stakeholders that financial discipline remains a priority.

Otedola further noted that the clean-up would help rebuild trust among investors, regulators, and customers, while positioning the bank on a healthier footing ahead of future regulatory and capital requirements.

“The CBN is pushing banks to stop delaying problems. By clearing these legacy loans, First HoldCo has drawn a clear line under past issues. It reinforces accountability and strengthens confidence in the institution,” he added.

Despite the substantial write-off, the First Bank chairman stressed that the group’s core banking operations remain strong, supported by solid revenue performance.

He revealed that the bank recorded ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, providing sufficient financial capacity to absorb the one-time charge without undermining operational stability.

“The most important point is that the business itself is still strong. The income engine gave us the resilience to absorb the clean-up and remain firmly standing,” Otedola said.

Looking ahead, he expressed optimism about the bank’s prospects, noting that the balance sheet clean-up positions First Bank to better navigate the ongoing recapitalisation drive in the banking sector and pursue sustainable growth.

“Entering 2026, First Bank is lighter, cleaner, and better prepared for the recapitalisation era and future expansion. Clearing bad loans, maintaining strong income, and taking a long-term view are key to real value creation,” he concluded.

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