A combined photo of Femi Otedola and First Bank headquarters
By Victory Oghene
The profit of one of old generation banks, First Bank has crashed by
92% on account of N748 billion bad loans.
This much was revealed by the
Group Chairman of First Bank Holdings, Mr Femi Otedola.
He defended the company’s decision to take a one-time charge of N748 billion to clear legacy bad loans, describing the move as a strategic step toward long-term stability despite its impact on reported profits.
The billionaire businessman disclosed this via his X handle on Saturday, explaining that the massive provisioning caused the holding company’s profit to decline by 92 per cent.
Otedola stated that the decision was aligned with the Central Bank of Nigeria’s directive for banks to address non-performing loans transparently rather than defer the problems.
“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,” he wrote.
He explained that the action was necessary to close the chapter on problematic loans from previous years and to 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.
Despite the significant write-off, the First Bank chairman emphasised that the bank’s core operations remained robust, pointing to strong revenue generation as evidence of underlying financial health.
According to him, the bank recorded N2.96tn in interest income and N1.91tn in net interest income, which provided the financial capacity to absorb the cleanup while maintaining operational stability.
“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 cleanup and still stay standing,” he stated.
Otedola expressed optimism about the bank’s prospects, noting that the cleanup positioned First Bank favourably for the recapitalisation exercise and future growth.
“Now at First Bank and beyond we go into 2026 lighter, cleaner and better prepared for the recapitalisation era and serious growth. Bad loans cleared + strong income engine + long-term thinking = real value creation,” he concluded.
Meanwhile, the Owerri division of the National Industrial Court, Imo State, has found First Bank guilty of defaming its former staff member, Collins Godspower, and unjust sack of the ex-banker.
Justice Nelson Ogbuanya, who presided over the court awarded a punitive cost of N50 million, against the bank in favour of Godspower, over “wrongful blacklisting” by the Central Bank of Nigeria (CBN), following what the court described as “career-damaging and malicious actions by the bank.
While delivering judgment in a suit marked NICN/YEN/125/2016, filed by the bank’s former worker, the judge, also set aside the employment ban placed on him and held that First Bank Plc acted wrongly in forwarding his name and biodata to the CBN as an ex-employee disengaged for fraud and dishonest activities.
Justice Ogbuanya ruled that the action, which led to the claimant’s blacklisting under Section 44(4) of the Banks and Other Financial Institutions Act, amounted to unfair labour practice and workplace defamation.
During the trial of the suit Godspower through his lawyer, G. C. Ihunwo, told the court that his employment with the First bank was terminated on the grounds of “services no longer required,” after he had earlier been suspended and later recalled from suspension over allegations of involvement in an unauthorised dollar purchase transaction.
He said he later discovered that his inability to secure another banking job was because First Bank Plc had published his name and photograph on its portal and sent his details to the CBN as one of those dismissed for fraud, leading to his blacklisting from the financial sector.
In its defence, first Bank Plc through its lawyer, A. N. Ozornafor, admitted publishing the claimant’s details and sending his name to the CBN but argued that it acted in compliance with BOFIA and a regulatory circular issued by the apex bank.
The bank also challenged the jurisdiction of the National Industrial Court to hear the matter.
However, Justice Ogbuanya dismissed the objection, affirming that the court has jurisdiction over employment-related disputes, including workplace defamation.
“From the record, I find that the subject matter of the dispute bordering on workplace defamation and the manner of termination of employment raises issues of unfair labour practice in this suit, which involves issues of employment relationship as it arose from the workplace,” the judge held.
He added, “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.”
On the merits of the case, the court found that recalling the claimant from suspension pending investigation amounted to his exoneration by operation of law and that there was no justification for reporting him to the CBN.
The judge faulted the bank for terminating the claimant’s employment on one ground while portraying him to regulators as having been disengaged for fraud.
Ogbuanya held, “The claimant’s grouse is not necessarily the mere act of termination of employment on the reason of ‘services no longer required’, but more of the defendant’s overreaching acts of publishing the claimant’s name and photograph in its accessible portal and sending his name to CBN for sanction, without him being indicted or the reason disclosed in his termination letter.”
In awarding damages, the judge held: “The sum of N50,000,000.00 is hereby awarded against the defendant in favour of the claimant, as compensation by way of general damages for the act of unfair labour practice.”
The judge said the wrongful publications “tarnished his cherished career and rendered him jobless and traumatised,” and consequently ordered that the publications be set aside.
“As a consequential order, the said wrongful publications are hereby set aside, and the defendant is restrained from further giving effect to its career-damaging publications against the claimant,” Ogbuanya ruled.
Credit: Punch/NICN
