Group Chairman of First Bank Holdings, Femi Otedola, has explained the rationale for writing off ₦748 billion in legacy non-performing loans, describing it as a necessary move to secure long-term financial stability.
Otedola said the decision, though costly in the short term, was a deliberate strategy to strengthen the bank’s balance sheet and restore confidence among investors and regulators.
He disclosed this in a post on his X handle on Saturday, noting that the move was in line with a directive from the Central Bank of Nigeria (CBN), which has urged banks to confront bad loans transparently rather than continually deferring them.
“At First HoldCo, we decided to clean house properly,” Otedola wrote. “We took a huge one-time hit of ₦748bn to admit old bad loans instead of pretending they do not exist. That is why profit looks like it crashed by 92 per cent. Painful headline, but it is a serious long-term move.”
According to the billionaire investor, the write-off was aimed at addressing problematic loans accumulated over previous years and positioning the bank for sustainable growth.
The move significantly affected First HoldCo’s reported profit figures, but Otedola stressed that the short-term pain was necessary to build a stronger, more transparent financial institution.
The development has drawn attention across Nigeria’s banking sector, with analysts noting that it reflects increasing regulatory pressure on lenders to improve asset quality and adopt cleaner, more sustainable balance sheets.
