N748bn loss doesn’t shake First Bank

•Says 92% profit plunge strategic for ‘house cleaning’

Chairman of First Bank Holdings Plc, Femi Otedola, has explained that the bank’s 92 per cent plunge in profit after tax in 2025 was a deliberate, one-off move to write off legacy bad loans totaling N748 billion. The decision, he said, was aimed at strengthening the institution for long-term growth rather than reflecting a decline in its core operations.

“At First HoldCo we decided to clean the house properly,” Otedola said. “We took a huge one-time hit of N748 billion to acknowledge old bad loans instead of pretending they didn’t exist. That is why profit looks like it crashed by 92 per cent.”

He noted that the move aligns with the Central Bank of Nigeria’s renewed push for banks to fully recognise impaired assets instead of deferring them indefinitely. According to Otedola, the action effectively closes the chapter on problematic loans accumulated over previous years, sending a clear message that borrowing obligations must be honoured.

Despite the headline profit decline, Otedola emphasised that First Bank’s underlying business remains robust. The group generated N2.96 trillion in interest income and N1.91 trillion in net interest income, providing sufficient financial strength to absorb the massive write-off without threatening operational stability.

“The strong earnings show that our income engine is intact and capable of supporting future expansion,” he said.

Otedola added that the clean-up positions First Bank favourably ahead of the upcoming banking sector recapitalisation and a new phase of growth expected from 2026.

Market analysts noted that while the write-off has reduced short-term profitability, it could boost transparency, improve asset quality, and strengthen investor confidence in the long run, especially as regulators intensify scrutiny of bank balance sheets.

Otedola concluded that the combination of cleared bad loans, strong interest income, and long-term strategic planning represents genuine value creation for shareholders, even if it comes at the cost of dramatic short-term headlines.