Femi Otedola reveals why FirstBank wrote off N748bn bad loans
Group Chairman of First financial institution Holdings, Femi Otedola, has defined the intent in the back of the choice to jot down off N748bn in legacy non-performing loans, describing it as a calculated move to invulnerable the financial institution’s long-term financial health, no matter its heavy impact on profits.
Oyedokun disclosed this in a submit on his X take care of on Saturday January 31,, noting that the significant provisioning workout ended in a ninety two consistent with cent drop within the group’s mentioned earnings.
He stated the choice aligned with the Central financial institution of Nigeria’s directive urging banks to confront bad loans head-on in preference to defer the trouble.
“at first HoldCo we determined to clean residence well. We took a big one-time hit of N748bn to confess old horrific loans instead of pretending they do now not exist. that is why earnings seems like it crashed by 92 in keeping with cent. Painful headline, however it’s far a major lengthy-time period flow,” he wrote.
in step with the billionaire investor, the circulate was vital to in the end deal with complex loans gathered over several years and to repair confidence among investors and other stakeholders.
“Why do this now? due to the fact the CBN is pushing banks to prevent kicking troubles down the street. So First HoldCo basically closed the chapter on messy loans from beyond years which sends a clear message that borrowing has effects and it enables rebuild faith,” Otedola brought.
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