Femi Otedola, chairman of First HoldCo Plc, has revealed that the company took a significant profit hit in 2025 to address and clean up its N748 billion worth of bad loans.
In a post shared on his X account on Saturday, Otedola explained that this decision was part of a long-term strategy, although it caused a sharp drop in the company’s 2025 profit.
“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%,” Otedola wrote.
He went on to explain the reasoning behind the decision, saying it was prompted by regulatory pressure: “Why do this now? Because the @cenbank is pushing banks to stop kicking problems down the road.”
According to Otedola, the move allowed First HoldCo to “close the chapter” on the problematic loans of previous years.
He emphasized that the action was meant to send a clear message that borrowing has real consequences, which would ultimately help rebuild trust in the banking system.
Despite the massive impairment loss, Otedola reassured stakeholders that the company’s core business remains strong.
“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, Otedola expressed optimism for the future: “Now at @FirstBankngr and beyond, we go into 2026 lighter, cleaner, and better prepared for the recapitalization era and serious growth.”
First HoldCo’s unaudited financial statement for 2025, released on Friday, showed a 93% drop in profit, from N677 billion in 2024 to N44.9 billion in 2025, a direct result of the N748 billion impairment loss.
The company grappled with substantial non-performing loans (NPLs), with impairment losses reaching N710 billion on loans and advances to customers, along with an additional N34.9 billion in impairments on other assets.
Furthermore, the company reported a N10.8 billion expected credit loss on loans to banks and a N4.2 billion loss on investment securities, though there was a reduction in off-balance-sheet impairments.
On a more positive note, First HoldCo reported a 4.8% year-on-year increase in gross earnings, totaling N3.4 trillion. This was primarily driven by a strong 36.3% year-on-year growth in net interest income, which reached N1.9 trillion. The growth was supported by improved yields and margins of 17.11% and 11%, respectively.
The company also saw a rise in net fees and commissions, which increased by 18.7% year-on-year to N290.7 billion.
Despite the significant financial challenges, Otedola’s statement highlighted that First HoldCo’s robust income streams position the company well for future growth, even as it navigates the recapitalization process.
