The Chairman of First HoldCo Plc, Femi Otedola, has defended the company’s decision to write off N748 billion in legacy non-performing loans, describing it as a strategic move designed to secure long-term financial stability despite its heavy impact on reported profit.
Otedola disclosed this in a post shared on his X account on Saturday, explaining that the large-scale provisioning contributed to a 92 percent decline in the Group’s profit figure.
He said the action aligns with the Central Bank of Nigeria’s push for banks to address non-performing loans transparently rather than delaying recognition of problem assets.
According to him, the holding company opted for a comprehensive clean-up of its loan book by recognising long-standing bad loans in one move instead of carrying them forward.
Otedola noted that while the decision resulted in a sharp drop in profit, it was necessary to resolve issues tied to problematic credit exposures accumulated over the years and to reinforce confidence among investors and other stakeholders.
He added that the move sends a strong signal about financial discipline within the banking system and underscores the consequences of poor borrowing practices, while helping to restore trust in the institution’s financial position.
Despite the size of the write-off, Otedola stressed that the bank’s core operations remain robust. He pointed out that the institution recorded N2.96 trillion in interest income and N1.91 trillion in net interest income, which he said provided sufficient strength to absorb the one-off clean-up while maintaining operational stability.
Looking ahead, he expressed optimism about the Group’s outlook, stating that the balance sheet restructuring has placed First Bank in a stronger position for recapitalisation and sustainable expansion.
Otedola said the institution is entering the new financial period with a cleaner balance sheet, improved financial health, and stronger capacity to pursue growth opportunities, adding that the combination of loan book clean-up, solid earnings, and long-term strategy would support lasting value creation.
