Chairman of First HoldCo Plc, Mr Femi Otedola, has explained that the company’s reported 92 per cent drop in profit for the 2025 financial year was the result of a deliberate decision to recognise legacy bad loans ahead of the Central Bank of Nigeria’s (CBN) recapitalisation deadline in 2026.
In a statement shared on his X account on Saturday, Otedola disclosed that the financial institution absorbed losses amounting to ₦748 billion arising from old non-performing loans. According to him, the decision was taken to clean up the company’s balance sheet rather than continue to carry unresolved liabilities.
He noted that the current leadership of the CBN, under Governor Olayemi Cardoso, has intensified pressure on banks to address longstanding asset quality issues. Otedola said regulators are now insisting that financial institutions stop postponing the resolution of problematic loans.
The billionaire investor, who recently increased his shareholding in First HoldCo to 18.12 per cent, stressed that the company remains fundamentally strong despite the sharp decline in reported profit. He explained that the headline figure reflects a one-off adjustment rather than a collapse in the bank’s core operations.
According to Otedola, First HoldCo recorded ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income during the financial year. He said these strong earnings provided the cushion needed to absorb the losses from the loan clean-up exercise without threatening the institution’s stability.
He further stated that the move positions the company favourably ahead of the March 31, 2026 recapitalisation deadline set by the CBN. By resolving legacy loan issues now, he said First HoldCo would enter the next phase of banking reforms with a cleaner balance sheet and improved credibility.
Otedola described the decision as painful in the short term but necessary for long-term growth and value creation. He said the clean-up sends a strong message to borrowers about accountability while helping to rebuild investor and public confidence in the institution.
According to him, clearing bad loans, maintaining a strong income-generating base, and adopting a long-term strategic outlook are essential ingredients for sustainable growth. He added that First HoldCo is now better prepared for the recapitalisation era and positioned for serious expansion beyond 2026.
