Group Chairman of First Bank Holdings, Femi Otedola, has justified the company’s one-off N748bn charge to write off legacy bad loans, calling it a strategic move to secure long-term financial stability despite the hit to profits.

Otedola revealed on Saturday via his X account that the heavy provisioning led to a 92 per cent drop in the holding company’s profit.

He explained that the action followed a Central Bank of Nigeria directive urging banks to confront non-performing loans openly instead of postponing the issue.

“At First HoldCo we decided to clean house properly. We took a huge one-time hit of N748bn to admit old bad loans instead of pretending they do not exist. That is why profit looks like it crashed by 92 per cent. Painful headline, but it is a serious long-term move,” he wrote.

He said the move was essential to resolve lingering issues from past bad loans and to rebuild confidence among stakeholders.

“Why do this now? Because the CBN 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,” Otedola added.

Despite the substantial write-off, the First Bank chairman highlighted that the bank’s core operations are resilient, citing strong revenue as a sign of its solid financial foundation.

According to fine, the bank generated N2.96tn in interest income and N1.91tn in net interest income, giving it the capacity to absorb the one-off cleanup while maintaining operational stability.

“The key point is this: our business itself is STILL strong. It made N2.96tn in interest income and N1.91tn in net interest income, which gave it the strength to take the cleanup and still stay standing,” he stated.

Otedola expressed optimism about the bank’s prospects, noting that the cleanup positioned First Bank favourably for the recapitalisation exercise and future growth.

“Now at First Bank and beyond we go into 2026 lighter, cleaner and better prepared for the recapitalisation era and serious growth. Bad loans cleared + strong income engine + long-term thinking = real value creation,” he concluded.