₦748bn Loan Write-Off: Otedola Defends First HoldCo Clean-Up, Experts and Shareholders Express Mixed Reactions

The decision by First HoldCo Plc to write off ₦748 billion in legacy non-performing loans has deepened conversations around transparency and accountability in Nigeria’s banking sector, with an undisclosed group of shareholders now formally demanding the publication of the names of major loan defaulters whose exposures contributed to the massive impairment.

According to multiple reports, Chairman of First HoldCo Plc, Femi Otedola, has defended the write-off as a necessary balance-sheet clean-up aligned with regulatory reforms, shareholders insist that meaningful transparency must include accountability for borrowers who defaulted on large obligations.

The one-off write-down resulted in a 92 per cent decline in the group’s reported profit, sparking market reactions and renewed scrutiny of banks’ credit practices.

Addressing the concerns, Otedola explained that the sharp profit drop was the consequence of a deliberate decision to recognise long-standing bad loans rather than continue to carry them forward.
In a post on his X (formerly Twitter) handle, Otedola stated:

“At First HoldCo we decided to clean house properly. We took a huge one-time hit of ₦748bn 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.”

According to him, the losses are non-recurring and largely inherited from previous years, marking the closure of a difficult chapter rather than a deterioration in current operations.

Otedola further linked the move to the Central Bank of Nigeria’s (CBN) push for stronger bank balance sheets, particularly ahead of the ongoing banking recapitalisation exercise.

“The CBN is pushing banks to stop kicking problems down the road. First HoldCo has closed the chapter on messy loans from past years. This sends a clear message that borrowing has consequences and helps rebuild trust,” he added.

Despite the headline profit decline, the group’s chairman maintained that First HoldCo’s fundamentals remain strong, pointing to ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income as evidence of the bank’s capacity to absorb the one-off loss.

Experts Weigh In

Reacting to the development, economist Celestine Ukpong described the write-off as a tough but necessary reset that could strengthen confidence in the institution over time.

He noted that recognising bad loans upfront improves transparency and aligns Nigerian banks with international best practices.

“This approach may hurt in the short term, but it is healthier for the system. It positions the bank better for recapitalisation and long-term sustainability,” Ukpong said.

Similarly, Peter Adebayo, FCA, a chartered accountant and financial analyst, said the impairment should be viewed as a balance-sheet correction rather than a sign of distress.

“A one-off write-down of this size does not automatically indicate weakness. What matters is the bank’s ability to generate earnings, and the interest income figures suggest the core business remains resilient,” he said.

Shareholders Demand Disclosure

However, the clean-up has reignited shareholder agitation. An undisclosed group of investors, speaking through market sources, has called for the public disclosure of major loan defaulters linked to the written-off facilities.

The shareholders argue that without naming chronic defaulters, the burden of failed credit decisions is unfairly transferred to investors, while borrowers escape accountability.

“Writing off ₦748 billion is not a small issue. Shareholders deserve to know who took these loans and failed to repay them.

Transparency must go beyond figures,” a source within the shareholder group said.
They contend that publishing the names of major defaulters would strengthen corporate governance, deter reckless borrowing, and reinforce credit discipline across the banking sector—especially as banks seek fresh capital under the recapitalisation programme.

Some investors have also urged the CBN to issue clearer guidance on the disclosure of large non-performing exposures, noting that regulatory backing would help standardise transparency practices across the industry.
Market analysts say the pressure from shareholders reflects a broader shift in investor expectations, with increasing emphasis on accountability, risk management, and governance, rather than headline profitability alone.

As Nigerian banks continue to clean up their balance sheets in line with regulatory reforms, observers believe the balance between confidentiality rules and public accountability will play a critical role in shaping investor confidence and the credibility of the recapitalisation process.

First HoldCo, Femi Otedola, ₦748bn loan write-off, Nigerian banking sector, CBN recapitalisation, non-performing loans, bank shareholders, loan defaulters, banking transparency

First HoldCo’s ₦748bn loan write-off has sparked fresh debate as Femi Otedola defends the clean-up, while an undisclosed group of shareholders demands the disclosure of major loan defaulters, raising broader questions about transparency, accountability, and banking reforms in Nigeria.