Billionaire businessman and Chairman of First HoldCo Plc, Femi Otedola, has issued a staunch public defense of the financial group’s decision to absorb a colossal one-time hit of ₦748 billion to write off old bad loans, framing it as a painful but essential strategic cleanup.
In a detailed explanation posted on his X (formerly Twitter) account, Otedola directly addressed the ensuing 92% profit crash, stating the group chose to “clean house properly” by confronting longstanding problems head-on rather than allowing them to fester.
Okay News reports that Otedola was unequivocal in his reasoning, describing the massive write-off as a deliberate move to admit to historical non-performing loans carried over from previous years instead of pretending they did not exist. He acknowledged the “painful headline” this created but insisted it was a “serious long-term move” critical for the health and future of the company, which is the parent of First Bank of Nigeria.
Femi Otedola directly linked this decisive action to the ongoing reform agenda of the Central Bank of Nigeria (CBN), noting that the regulator is actively pushing banks to strengthen their balance sheets and cease the practice of postponing asset recognition, especially ahead of a critical recapitalization exercise.
Otedola stated that by taking this hit, First HoldCo has effectively “closed the chapter on messy loans from past years,” an action he says sends a clear market message about borrowing consequences and, importantly, helps rebuild eroded trust with investors and depositors.
Emphasizing the underlying strength of the business, Otedola pointed out that the group’s core operations remain robust, with a formidable capacity to absorb such a significant one-off loss.
He highlighted that First HoldCo generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, financial muscle that provided the necessary buffer for this drastic cleanup operation. For Otedola, this move is not a signal of weakness but a calculated step to purge the books, improve transparency, and restore confidence for sustainable growth.
The Chairman’s public defense underscores a pivotal moment for the Nigerian banking sector, as institutions align with regulatory pressures for greater accountability.
Otedola’s framing of the write-off as a necessary purge positions it as a foundational step for First HoldCo’s future, aiming to transform a short-term profit crisis into a long-term reputational and strategic gain. The success of this costly gamble will depend on the market’s reception and the company’s ability to deliver on the promised renewed growth trajectory in the coming years.
