Otedola: First HoldCo took major profit hit to clean up N748bn bad loans

By Abubakar Yunusa

Femi Otedola, chairman of First HoldCo Plc, says the company took a major profit hit to clean up its N748 billion in bad loans.
In a post on his X account over the weekend,Otedola said the decision to clean up the loans was a serious long-term move, even though it caused a sharp fall in the company’s 2025 profit.
“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%,” the post reads.
“Why do this now? Because the @cenbank is pushing banks to stop kicking problems down the road.”
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%. Painful headline, but it is a serious long term move.
According to the chairman, the move allowed First HoldCo to close the chapter on “messy” loans from previous years.
This, the billionaire said, sends a clear signal that borrowing has consequences and helps to rebuild trust in the banking system.
Despite the impairment loss, Otedola said the group’s core business remains strong.
“It made N2.96tn in interest income and N1.91tn in net interest income, which gave it the strength to take the clean up and still stay standing,” he added.
“Now at @FirstBankngr and beyond we go into 2026 lighter, cleaner and better prepared for the recapitalisation era and serious growth.”
In its unaudited financial statement released on Friday, First HoldCo said it recorded a profit of N44,9 billion — down by 93 percent from the N677 billion booked in 2024, signalling the impact of the impairment loss.
According to the company’s financial statement, the HoldCo grappled with significant non-performing loans in 2025.
Impairment losses rose to N710 billion on loans and advances to customers, while impairments on other assets increased by N34.9 billion.
The group also recorded an expected credit loss of N10.8 billion on loans to banks and N4.2 billion on investment securities, alongside a reduction in off-balance-sheet impairments.
First HoldCo said it posted a 4.8 percent year-on-year increase in gross earnings to N3.4 trillion.
The financial institution said the performance was driven by a 36.3 percent year-on-year growth in net interest income to N1.9 trillion, supported by improved yields and margins of 17.11 percent and 11 percent, respectively.
Similarly, net fees and commissions reportedly rose by 18.7 percent year-on-year to N290.7 billion.