Otedola Justifies N748bn Loan Write-off as First Bank Profit Drops 92%

The Group Chairman of First Bank Holdings Plc, Femi Otedola, has defended the company’s decision to write off N748 billion in non-performing loans, saying the move was a deliberate strategy to strengthen the institution’s long-term stability despite its impact on profits.

Otedola said the one-off provisioning led to a 92 per cent drop in the holding company’s reported profit, but stressed that the action was in line with the Central Bank of Nigeria’s push for banks to deal openly with legacy bad loans rather than postponing the issue.

In a post on his X handle on Saturday, the billionaire businessman explained that First HoldCo chose to recognise and clear problematic loans accumulated over previous years instead of carrying them forward on its books.

He said the decision was aimed at closing a difficult chapter in the bank’s history, sending a signal of accountability to borrowers and restoring confidence among investors and other stakeholders.

Otedola noted that the clean-up was prompted by regulatory pressure from the CBN, which has urged financial institutions to address non-performing loans transparently as part of efforts to strengthen the banking sector.

Despite the scale of the write-off, he said First Bank’s underlying business remained solid, citing strong earnings as evidence of the institution’s financial resilience.

According to him, the bank generated N2.96 trillion in interest income and N1.91 trillion in net interest income, providing enough strength to absorb the provisioning while maintaining operational stability.

He added that the exercise has positioned the bank favourably ahead of the ongoing recapitalisation drive and future expansion.

Otedola expressed confidence that the balance sheet clean-up would leave First Bank better prepared for growth in the coming years, describing the move as a foundation for sustainable value creation going into 2026.