Femi Otedola, chairman of First HoldCo Plc, has hinted at increasing his 26 percent holding in First HoldCo to 51 percent as the lender’s transformation gathers pace.
Otedola spoke in an exclusive interview with Nairametrics
published on Monday.
The interview comes as First HoldCo recently became
Nigeria’s most valuable listed banking group after its shares more than doubled
this year.
The milestone followed a series of share acquisitions, as
Otedola sought to tighten his grip as the company’s largest shareholder.
In the interview, the mogul said he has invested more than
N600 billion of his personal wealth in First HoldCo, describing the move as a
“long-term generational commitment” rather than another turnaround investment
he would eventually exit.
Responding to speculation that he intends to consolidate his
position in the group, Otedola hinted that his investment journey is far from
over.
“My investment threshold is always over and above 51
percent,” he said.
“One of my key investment principles is that firm
shareholder control, with due regard for minority interest, is a key ingredient
to executing reforms and restructuring to deliver value to all stakeholders.”
The businessman said the same strategy had guided his
investments in African Petroleum Plc, later renamed Forte Oil Plc, where he
gradually increased his shareholding from 28 percent to 75 percent before
exiting the company in 2019.
He said he also increased his stake in Geregu Power Plc from
51 percent to 95 percent before reducing it to 77 percent after the company’s
public listing.
“I am on the same trajectory with First HoldCo Plc,” Otedola
said.
“To date, I have invested over N600 billion of my personal
wealth in First HoldCo Plc — a figure that speaks not to speculation, but to
unflinching confidence in the institution’s future, fundamentals and an
unwavering personal commitment to its success.”
‘FIRST BANK WAS ON THE BRINK’
Otedola said his decision to invest in First HoldCo came at
a time when the institution was facing one of the most challenging periods in
its history.
According to the billionaire, years of weak corporate
governance, poor credit administration, and insider abuses had left First Bank
burdened with more than N2 trillion in bad loans — a situation he said
threatened the institution’s survival.
He said the lender’s capital position had deteriorated to
the point where the Central Bank of Nigeria (CBN) considered regulatory
intervention necessary to protect depositors and minority shareholders.
“Before 2021, First Bank of Nigeria… stood at a genuine
crossroads,” he said.
“The bank’s loan book had deteriorated to the point where
over N2 trillion in bad loans sat on its balance sheet — a burden compounded by
a culture of recalcitrant and delinquent debtors who treated the institution as
an outlet to exploit, obtaining credit facilities with little or no intention
of repayment.
“The Central Bank of Nigeria found the bank’s capital
position so compromised, and its governance failures so severe, that the
institution stood on the verge of regulatory takeover to protect its over 30
million customers and minority shareholders.”
Otedola recalled that the CBN eventually dissolved the
boards of both First Bank and First HoldCo over governance failures, unresolved
insider exposures and breaches of regulatory directives.
Rather than view the crisis as a deterrent, he said he saw
an opportunity to rebuild one of Africa’s oldest financial institutions.
“Recognising the institution’s systemic importance and its
potential for renewal, I began a deliberate, phased acquisition of shares in
the institution,” he said.
“This was not a hostile or opportunistic move, but a
calculated commitment to rescue, rebuild and reposition First HoldCo Plc.”
Otedola said one of the board’s first priorities after he
became chairman in January 2024 was to restore confidence in the institution
through sweeping governance reforms and an aggressive clean-up of its balance
sheet.
The billionaire said the group recognised a one-off
impairment of N1.7 trillion to eliminate legacy problem loans and embarked on a
recapitalisation programme involving rights issues, private placements, and
strategic divestments.
This, he said, enabled the institution to exceed the CBN’s
N500 billion minimum capital requirement while positioning it towards an
ambitious N1 trillion paid-up capital target.
The chairman said stronger capital buffers are essential if
Nigerian banks are to support the country’s ambition of becoming a $1 trillion
economy.
“I reiterate my belief that a modern Nigerian economy
aspiring toward a $1 trillion GDP cannot be anchored on weakly capitalised
banks,” he said.
‘FIRST BANK IMPAIRED OVER N3 TRILLION IN 10 YEARS’
He disclosed the institution had impaired more than N3
trillion over the past decade and tightened its credit governance framework to
prevent a recurrence of the practices that created the crisis.
Otedola said the reforms have already begun to translate
into improved financial performance.
He cited the group’s first-half 2026 results, which showed
that profit before tax rose 83.5 percent year-on-year to N653.4 billion, while
return on average equity climbed to 30.4 percent, describing it as the highest
among Nigeria’s leading banking groups.
He also linked the sharp appreciation in First HoldCo’s
share price to the company’s improved fundamentals and sustained investor
confidence.
“It is a mix-and-match of both,” he said when asked whether
the rally reflected the so-called ‘Otedola effect’.
“Our continued buying signals conviction to the market that
we are convinced about the future, and this is anchored in our disclosed
earnings turnaround, not market sentiment alone.”
Otedola also dismissed suggestions that he could eventually
monetise his investment in First HoldCo after completing the turnaround, as he
did with Forte Oil.
He said banking differs fundamentally from businesses in the
oil, gas, and power sectors because it is built on public trust and plays a
systemic role in the economy.
“The decision to sell, however, is not purely based on
exiting like a private equity model but driven by market conditions and other
personal objectives,” the investor said.
“However, the situation with my foray into and continuous
investment in First Holdco Plc is completely different.
“It goes without saying that First Holdco is a long-term
generational commitment, unlike my previous involvement(s).
“The free-market platform of the financial services industry
and our commitment to internal reforms provide the basis of my huge investment
and hence a long-term commitment.”
He said the group’s future would be built on stronger
corporate governance, improved risk management, innovation, and operational
discipline.
Otedola noted that the board intends to reward shareholders
through consistent dividend payments while maintaining sufficient capital to
fund future growth.
He also said Nigerian banks remain undervalued relative to
their African peers, despite delivering strong returns on equity, expressing
confidence that First HoldCo’s transformation would help change investors’
perception of the sector.
“Our vision and my legacy as chairman is to transform an
institution that stood at the brink of a regulatory takeover to one setting the
pace for its industry,” Otedola said.
The chairman also said his ambition is to restore First
HoldCo to its position as Nigeria’s leading financial institution and one of
Africa’s foremost banking groups.
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