February 02, (THEWILL) — First Bank of Nigeria has written off about ₦748 billion in non-performing loans as part of a sweeping clean-up of its balance sheet aimed at restoring financial strength and improving long-term profitability, according to billionaire investor and chairman, Femi Otedola.
Otedola explained that the move was necessary to address legacy loans accumulated over several years, many of which had become unrecoverable due to weak credit processes, economic downturns, and exposure to distressed sectors.
The write-offs, he said, form part of a broader reform agenda to strengthen corporate governance and reposition the bank for sustainable growth.
He noted that while the massive loan write-off impacted short-term earnings, it has significantly improved the bank’s asset quality and reduced the burden of toxic assets that had weighed on performance.
The decision is viewed as a bold but essential step, aligning FirstBank with global banking best practices where banks periodically clean up their books to ensure transparency and financial stability.
The clean-up has also supported improved capital adequacy and boosted investor confidence, especially as Nigeria’s banking sector undergoes recapitalisation under the Central Bank of Nigeria’s new regulatory framework.
Otedola added that FirstBank is now focused on strengthening its risk management systems, expanding profitable lending, and leveraging digital banking to grow its customer base.
The development comes as Nigerian banks face heightened regulatory scrutiny and rising credit risks in a volatile economic environment marked by inflation and currency pressures.
Market watchers believe that with a healthier balance sheet, FirstBank is better positioned to compete aggressively, support economic growth, and deliver stronger returns to shareholders in the coming years.
Ogochukwu Onwaeze
