Group chairman says clearing legacy bad loans strengthens balance sheet despite short-term impact on profits
By Wapcodehub9ja LIVE News Correspondent Reporting Live From Lagos, Lagos State, Nigeria
The Group Chairman of First Bank Holdings, Mr. Femi Otedola, has defended the company’s decision to take a one-time charge of ₦748 billion aimed at clearing long-standing non-performing loans, describing the move as a deliberate strategy to secure the institution’s long-term financial stability.
Speaking on the development, Otedola acknowledged that the decision had a significant impact on the company’s reported profits but stressed that it was necessary to strengthen the bank’s balance sheet and restore confidence among investors, regulators, and customers.
According to him, the charge was taken to fully address legacy loan issues that had weighed on the group’s financial performance for years. He explained that confronting the problem directly was preferable to allowing unresolved risks to continue affecting the bank’s future operations.
Otedola noted that the clean-up exercise positions First Bank Holdings for sustainable growth by improving asset quality and creating a stronger foundation for future profitability. He added that transparency and decisive action are essential for maintaining trust in the financial system.
The First Bank Holdings chairman emphasized that the move aligns with global best practices in banking, where institutions periodically take tough corrective measures to ensure long-term resilience rather than focusing solely on short-term earnings.
Industry analysts say the decision, though painful in the short term, could enhance the group’s credibility and strengthen its capital position, particularly at a time when Nigeria’s banking sector faces economic uncertainties.
Market observers also note that clearing bad loans could allow the bank to redirect resources toward productive lending, innovation, and expansion, supporting broader economic growth.
First Bank Holdings has assured stakeholders that the one-time charge is part of a broader restructuring strategy designed to reposition the group as a more stable and competitive financial institution.
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