Chairman of First HoldCo Plc, Femi Otedola, has attributed First HoldCo’s profit decline in 2025 to a deliberate N748 billion one-off impairment, taken to clean up legacy bad loans and strengthen the bank’s balance sheet.
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The clarification was made by Otedola in a statement shared on his X page.
The explanation comes after the company’s 2025 financial results revealed a sharp drop in pre-tax profit, despite strong underlying interest income, prompting questions from investors about the health of the business.
According to Otedola, the steep earnings decline reflects a strategic balance-sheet clean-up rather than weak business performance.
“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%. Painful headline, but it is a serious long-term move,” he said.
Explaining the timing, Otedola said the move was driven by regulatory direction and a shift in industry expectations.
“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,” he said.
“The key point is this: our business itself is STILL strong. It made N2.96tn in interest income and N1.91tn in net interest income, which gave it the strength to take the clean up and still stay standing,” Otedola stated.
Looking ahead, Otedola said First HoldCo is entering 2026 lighter, cleaner, and better prepared for the recapitalisation era and sustainable growth.
“Bad loans cleared + strong income engine + long term thinking = real value creation,” he added.
The company recently released its unaudited 2025 financial statements, reporting a pre-tax profit of N229.097 billion, down 71.18% from N796.461 billion in 2024, and a profit after tax decline of 93.36%, explaining the sharp drop despite strong underlying operations.
The stock closed at N45 on January 30, 2026, down 2.5% on the day and bringing the year-to-date loss to 6.05%.
Otedola increased his stake in First HoldCo Plc to 18.12% in 2025, making him one of the group’s largest shareholders after accumulating 3.82 billion additional units.
According to the filing, Otedola now holds a total of 8.05 billion First HoldCo shares, marking a year-on-year increase of over 90% from 4.23 billion units, or an 11.8% stake in 2024.
The move places him among only two shareholders with holdings above 5%, alongside RC Investment Management Limited, which controls a 23.47% stake.
The financial statement shows Otedola held 3.25 billion direct shares (7.31% stake) as of December 2025, up from 1.68 billion shares (4.71%) in 2024. His indirect shareholding also rose sharply to 4.80 billion units (10.81%), compared with 2.54 billion units (7.09%) in 2024.
The Central Bank of Nigeria’s (CBN) recapitalisation exercise is one of the most significant banking reforms in recent years, designed to strengthen banks’ balance sheets and position Nigerian lenders to compete globally.
Under the exercise, commercial banks with international authorisation were required to raise their capital base to N500 billion, while banks with national licences needed to reach N200 billion.
In November 2025, the CBN reported that 16 banks had already met its recapitalisation requirements, positioning them ahead of the March 2026 deadline. Some listed banks that have met the threshold include Access Bank, Zenith Bank, GTBank, Wema Bank, Jaiz Bank, and Stanbic IBTC.
First HoldCo Plc announced earlier in 2025 that its subsidiary, First Bank of Nigeria Limited (FirstBank), had successfully met the Central Bank of Nigeria’s minimum regulatory capital requirement of N500 billion.
Nigeria’s banking sector experienced a renewed rise in non-performing loans (NPLs) in 2025 after the Central Bank of Nigeria ended the regulatory forbearance that had allowed banks to restructure pandemic-affected loans without classifying them as impaired.
The move has pushed the industry’s NPL ratio to an estimated 7%, surpassing the prudential limit of 5%, signalling growing pressure on lenders.
The CBN explained that the increase reflects the crystallisation of previously restructured facilities that no longer qualify for special consideration.
The apex bank has cautioned that persistently high NPLs could undermine profitability and reduce credit availability unless banks strengthen their risk-management frameworks.
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