Otedola defends First Bank’s N748bn bad loan write-off

Chairman of First Bank Holdings, Femi Otedola, has defended the company’s decision to write off N748 billion in legacy non-performing loans, describing the move as a necessary step to strengthen the bank’s long-term financial health despite a sharp drop in reported profits.

In a post shared on his X account on Saturday, Otedola said the one-time provisioning led to a 92 per cent decline in profits but was aimed at cleaning up old liabilities and improving transparency.

According to him, the decision aligns with the Central Bank of Nigeria’s directive urging banks to address bad loans decisively rather than postpone the problem.

“At First HoldCo, we chose to clean house properly.

“We took a huge one-time hit of N748bn to recognise old bad loans instead of pretending they do not exist.

‘That is why profit appears to have dropped by 92 per cent. It’s a painful headline, but it’s a serious long-term move,” he wrote.

Otedola explained that clearing the backlog of troubled loans would help restore confidence among investors and stakeholders while reinforcing accountability in the lending process.

He noted that the cleanup sends a clear message that borrowers must meet their obligations and that the bank is committed to stronger risk management practices.

Despite the significant charge, Otedola stressed that First Bank’s core business remains solid.

He disclosed that the bank generated N2.96 trillion in interest income and N1.91 trillion in net interest income, providing enough strength to absorb the losses without destabilising operations.

“The key point is that our business is still strong. The income we generated gave us the capacity to take the cleanup and remain stable,” he said.

He added that the write-off has positioned the bank for the upcoming recapitalisation phase and future growth, expressing confidence that a cleaner balance sheet and sustained earnings will drive long-term value.

“Going into 2026, we are lighter, cleaner and better prepared for serious growth,” Otedola stated.