Femi Otedola, Group Chairman of First Bank Holdings, has defended the company's one-time N748 billion charge to write off legacy bad loans, citing it as a calculated measure to ensure long-term financial stability in spite of the decline in revenues.

Otedola disclosed on Saturday via his X account that the holding company's profit fell by 92% as a result of the excessive provisioning.

He clarified that the action was in response to a mandate from the Central Bank of Nigeria, which urged banks to address non-performing loans head-on rather than putting them off.

"We made the decision to properly clean the house at First HoldCo. Instead of pretending that old bad loans don't exist, we suffered a massive one-time charge of N748 billion to acknowledge them. Profit appears to have plummeted by 92% as a result. He remarked, "It's a painful headline, but it's a serious long-term move."

He said that the action was necessary to restore stakeholder confidence and address residual problems from previous bad loans.

"Why do this right now? because banks are being pressured by the CBN to cease delaying issues. Otedola continued, "First HoldCo essentially closed the chapter on messy loans from previous years, which sends a clear message that borrowing has consequences and it helps rebuild trust."

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.

The bank was able to absorb the one-time cleanup while retaining operational stability because, according to the fine, it generated N2.96 trillion in interest income and N1.91 trillion in net interest income.

The important thing to remember is that our company is still going strong. It earned N1.91 trillion in net interest income and N2.96 trillion in interest income, which allowed it to withstand the cleanup and continue to exist," he said.

Otedola was upbeat about the bank's future, pointing out that the cleanup put First Bank in a good position for the recapitalisation process and future expansion.

"At First Bank and beyond, we enter 2026 lighter, cleaner, and better equipped for the era of recapitalisation and significant expansion." He came to the conclusion that "real value creation = bad loans cleared + strong income engine + long-term thinking."