Femi Otedola, Chairman of First HoldCo Plc, has defended the holding company’s decision to take a substantial one-time charge of ₦748 billion for old, non-performing loans, characterising it as a necessary and deliberate balance sheet clean-up.
The massive provision led to a 92% year-on-year decline in the group’s reported profit for the period. However, Otedola, who also chairs First Bank of Nigeria’s parent company, argued that the move was a strategic choice for long-term health rather than a reflection of operational weakness. In a statement on social media, he explained that acknowledging legacy bad assets was preferable to continuing to conceal them, calling it a “serious long-term move” despite the painful immediate headline figure.
The write-off addresses long-standing impaired assets carried over from previous years. Otedola emphasised that the action aligns with regulatory pressure from the Central Bank of Nigeria (CBN), which has intensified its push for banks to rectify their balance sheets ahead of a wider industry recapitalisation exercise. He stated the CBN’s directive is to stop “kicking problems down the road,” and that First HoldCo’s action sends a clear message that borrowing has consequences, thereby helping to rebuild trust with stakeholders.
Despite the large exceptional loss, Otedola highlighted the underlying strength of the core banking operations. The group generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, figures he noted demonstrate sufficient earnings capacity to absorb the one-off hit.
This aggressive balance sheet repair is expected to enhance transparency, restore market confidence, and position First HoldCo for more sustainable growth. By confronting legacy issues proactively, the bank aims to comply with regulatory expectations and establish a cleaner foundation for its future, particularly as the broader Nigerian banking sector navigates the CBN’s recapitalisation requirements.
