In a bold move signaling strategic long-term thinking, the Group Chairman of First Bank Holdings, Femi Otedola, has revealed that the bank has undertaken a major cleanup of its legacy non-performing loans. The action involved taking a one-time accounting hit of ₦748 billion, a figure that significantly affected reported profits but is part of a deliberate plan to strengthen the institution for the future.
Addressing the rationale behind the move on his X’s handle: @realFemiOtedola, Mr. Otedola explained that the Central Bank of Nigeria has been urging financial institutions to stop deferring problem loans and address them head-on. “At First HoldCo, we decided to clean house properly,” he said. “Rather than pretending these old bad loans did not exist, we admitted them fully. The result is a temporary decline in reported profit, which appears to have fallen by 92 percent, but this is a necessary and prudent step for sustainable growth.”
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Otedola stressed that the cleanup is not a sign of weakness but a demonstration of the bank’s resilience. “Our business remains strong. First HoldCo generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income, which provided the capacity to take this one-time hit while continuing to operate effectively. We are stronger and cleaner going into 2026.”
The Chairman highlighted that the move also sends a clear message to borrowers and the broader financial ecosystem. By confronting past messy loans, First HoldCo reinforces the principle that borrowing carries consequences and underscores the bank’s commitment to transparency and trust. This approach, he said, will contribute to the overall stability and credibility of Nigeria’s banking sector.
Looking ahead, He said that the cleanup positions First Bank and its subsidiaries for the upcoming recapitalization era, where financial discipline and strong fundamentals will be essential for growth and competitiveness. “We are entering 2026 lighter, cleaner, and better prepared for both domestic and international opportunities,” he said.
He summarized the strategy with a simple formula: “Bad loans cleared, strong income engine, and long-term thinking equals real value creation. This is the path to sustainable growth and stakeholder confidence.”
Industry analysts have welcomed the announcement, noting that while the one-time hit is substantial, it reflects a proactive approach to risk management and corporate governance. By addressing legacy issues directly, First Bank Holdings not only strengthens its balance sheet but also sets a benchmark for transparency and accountability in the Nigerian banking sector.
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With this move, First Bank Holdings under Mr. Otedola’s leadership demonstrates that disciplined financial management, strategic foresight, and bold decision-making remain key drivers for long-term success in Nigeria’s competitive banking landscape.
