Why First HoldCo recorded 92% fall in profit — Otedola

 

Chairman of First HoldCo Plc, the parent company of First Bank of Nigeria, Femi Otedola, has explained the sharp 92 per cent drop in the group’s profit, attributing it to a deliberate decision to write off long-standing bad loans rather than weaknesses in its core operations.

The billionaire businessman said the group took a one-time hit of ₦748 billion to recognise old non-performing loans that had accumulated over previous years, describing the move as a strategic clean-up aimed at strengthening the bank’s balance sheet.

In a post on his X handle on Saturday, Otedola said, “At First HoldCo we decided to clean house properly. 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%. Painful headline, but it is a serious long-term move.”

The write-off resulted in a 92 per cent decline in profit for the period.

However, Otedola explained that the losses were one-off, arising from the recognition of non-performing loans carried over from prior years.

He added that the move was in line with the Central Bank of Nigeria’s directive for banks to strengthen their balance sheets and stop delaying the recognition of bad assets, particularly as the sector undergoes recapitalisation.

“Because the @cenbank is pushing banks to stop kicking problems down the road. So First HoldCo basically closed the chapter on messy loans from past years, which sends a clear message that borrowing has consequences, and it helps rebuild trust,” he stated.

Despite the write-off, Otedola said the group’s underlying business remains solid, with interest income of ₦2.96 trillion and net interest income of ₦1.91 trillion, providing sufficient capacity to absorb the impact of the losses.

He noted that the clean-up is expected to enhance transparency, restore investor confidence, and position First HoldCo for sustainable long-term growth.