Femi Otedola Explains Why FirstBank Wrote Off ₦748bn in Bad Loans
Billionaire businessman and chairman of FBN Holdings, Femi Otedola, has revealed why FirstBank of Nigeria wrote off a staggering ₦748 billion in bad loans, describing the move as a necessary step to restore the bank’s financial health and credibility.
Speaking on the issue, Otedola explained that the decision to clean up the bank’s loan book was aimed at addressing legacy problems that had accumulated over several years. According to him, many of the non-performing loans were linked to poor credit decisions, weak corporate governance, and loans granted without adequate collateral or proper risk assessment.
Otedola noted that writing off the bad loans was part of a broader reform agenda designed to reposition FirstBank as a stronger, more transparent, and more resilient financial institution. He said the move was not about covering up losses but about confronting reality and ensuring the bank could move forward on a solid footing.
He further disclosed that the clean-up exercise has helped improve FirstBank’s balance sheet, reduce its exposure to risky assets, and strengthen confidence among investors, regulators, and customers. The chairman emphasized that the reforms were carried out in line with regulatory standards and best practices in the global banking industry.
According to Otedola, the bank has since tightened its credit processes, strengthened internal controls, and improved corporate governance structures to prevent a repeat of such massive loan defaults in the future. He stressed that accountability and discipline remain central to the bank’s new operating culture.
The revelation has reignited public discussion about loan recovery, insider lending, and governance challenges within Nigeria’s banking sector. Analysts say the scale of the write-off highlights longstanding structural issues but also signals a willingness by FirstBank’s leadership to take difficult decisions in the interest of long-term stability.
FirstBank is one of Nigeria’s oldest and most systemically important financial institutions, and its performance has significant implications for the wider economy. Observers note that the aggressive clean-up of bad loans could place the bank in a stronger position to support businesses, drive credit growth, and compete effectively in the evolving financial landscape.
Otedola reiterated that the reforms at FirstBank are ongoing and aimed at ensuring sustainable profitability, regulatory compliance, and renewed trust in the institution as it enters a new phase of leadership and strategic direction.
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