First Bank’s profit has crashed by 92% due to a one-time charge of N748 billion to clear legacy bad loans, according to Group Chairman, Mr Femi Otedola. The billionaire businessman defended the company’s decision, describing it as a strategic step towards long-term stability.
“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 per cent. Painful headline, but it is a serious long-term move,” Otedola wrote on his X handle.
The action was necessary to close the chapter on problematic loans from previous years and restore stakeholder confidence in the institution. “Why do this now? Because the CBN is pushing banks to stop kicking problems down the road. So First HoldCo basically closed the chapter on messy loans from past years which sends a clear message that borrowing has consequences and it helps rebuild trust,” Otedola added.
The move has also led to a court ruling in favour of a former employee, Oluwafemi Adewuyi, who was wrongly accused of fraud and blacklisted from the financial sector. The National Industrial Court awarded N50 million damages against First Bank for unfair labour practice and ordered the bank to set aside its wrongful publications.
“Workplace Defamation, a type of defamation that can only arise in a work environment and related to the routine course of work, borders on labour relations at the workplace, which is essentially different and distinct from general defamation,” Justice Ogbuanya held.
