Chairman says one-time impairment was deliberate move to restore confidence and align with CBN reforms
Chairman of First HoldCo Plc, Femi Otedola, has said the company deliberately absorbed a massive one-time loss to clean up ₦748 billion worth of bad loans, a move that led to a sharp drop in the group’s profit for the 2025 financial year.
In a post on his X account on Saturday, Otedola described the decision as a long-term strategic move aimed at strengthening the institution, even though it significantly impacted profitability.
“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%,” he wrote.
He explained that the cleanup was carried out in response to regulatory pressure from the Central Bank of Nigeria, which has been urging banks to address legacy issues rather than defer them.
“Why do this now? Because the @cenbank is pushing banks to stop kicking problems down the road,” Otedola stated.
According to him, the move has helped the group close the chapter on problematic loans accumulated in previous years and sends a strong message about accountability in the banking sector.
“This sends a clear signal that borrowing has consequences and helps to rebuild trust in the banking system,” he added.
Despite the significant impairment loss, Otedola maintained that the group’s core operations remain resilient.
“It made ₦2.96tn in interest income and ₦1.91tn in net interest income, which gave it the strength to take the clean-up and still stay standing,” he said.
Looking ahead, he noted that the group is better positioned for the next phase of industry reforms.
“Now at @FirstBankngr and beyond, we go into 2026 lighter, cleaner and better prepared for the recapitalisation era and serious growth,” Otedola said.
In its unaudited financial statement released on Friday, First HoldCo reported a profit of ₦44.9 billion for 2025, representing a 93 percent decline from the ₦677 billion recorded in 2024. The company attributed the drop largely to the heavy impairment charges booked during the year.
The financial statement showed that the group grappled with significant non-performing loans in 2025. Impairment losses on loans and advances to customers rose to ₦710 billion, while impairments on other assets increased by ₦34.9 billion.
In addition, the group recorded expected credit losses of ₦10.8 billion on loans to banks and ₦4.2 billion on investment securities, alongside a reduction in off-balance-sheet impairments.
Despite these challenges, First HoldCo said its gross earnings rose by 4.8 percent year-on-year to ₦3.4 trillion.
The company added that the performance was supported by a 36.3 percent year-on-year growth in net interest income to ₦1.9 trillion, driven by improved yields and margins of 17.11 percent and 11 percent, respectively.
Net fees and commissions income also increased by 18.7 percent year-on-year to ₦290.7 billion.
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