Otedola defends N748bn bad loan write-off at First Bank

Billionaire investor and Chairman of First HoldCo Plc, the parent company of First Bank of Nigeria, Femi Otedola, has justified the group’s decision to absorb a one-off loss of ₦748 billion arising from legacy non-performing loans.

Otedola said the action was a strategic clean-up exercise, not an indication that the bank’s fundamentals are weak.

In a post shared on his official X account on Saturday, he explained that the company deliberately chose to confront long-standing bad debts head-on rather than continue to carry them on its books.

“At First HoldCo, we made a conscious decision to clean house thoroughly. We absorbed a one-time loss of ₦748bn by recognising old bad loans instead of acting as if they were not there.

That is why profit appears to have dropped by 92%. It’s a tough headline, but it’s the right long-term decision,” he wrote.

Following the write-off, the group recorded a 92 per cent drop in profit for the period.

Otedola clarified that the decline was not driven by current operational weakness but by the recognition of non-performing loans accumulated over several years.

He noted that the move is in line with the Central Bank of Nigeria (CBN)’s push for stronger balance sheets, as regulators have urged financial institutions to stop delaying the recognition of impaired assets, especially ahead of the ongoing banking recapitalisation programme.

“The @cenbank is insisting that banks stop pushing problems into the future. First HoldCo decided to close the chapter on problematic loans from the past.

This sends a strong signal that debt has consequences and helps rebuild confidence in the system,” he added.

Despite the sizeable write-off, Otedola stressed that the group’s core operations remain solid. He disclosed that First HoldCo recorded ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, giving it enough financial strength to absorb the losses.

According to him, the clean-up is expected to enhance transparency, strengthen investor trust, and place the group on a firmer path toward long-term and sustainable growth.