Chairman of First Bank Holdings, Mr Femi Otedola, has justified the company’s decision to take a one-time N748 billion charge to wipe off legacy bad loans, saying the move was necessary to secure long-term stability despite a sharp fall in reported profits.
Otedola disclosed via his X handle on Saturday that the provisioning led to a 92 per cent decline in profit, stressing that the decision followed the Central Bank of Nigeria’s directive for banks to deal transparently with non-performing loans rather than defer them.
According to him, First HoldCo chose to “clean house” by recognising old bad loans in one sweep, describing the move as painful but critical for restoring confidence and closing the chapter on problematic credits from previous years.
He said the cleanup sends a clear signal that borrowing has consequences and aligns with the regulator’s push for stronger financial discipline across the banking sector.
Despite the heavy write-off, Otedola maintained that the bank’s core business remains solid, citing N2.96 trillion in interest income and N1.91 trillion in net interest income as proof of its underlying strength.
He added that the exercise has positioned First Bank to enter the recapitalisation era better prepared and set the stage for sustainable growth going into 2026.
