By Seun Ibiyemi
First HoldCo Plc has announced its unaudited results for the year ended December 31, 2025, reporting resilient core earnings growth amid elevated impairment charges and regulatory costs.
The Group posted gross earnings of N3.4 trillion, representing a 4.8 per cent year-on-year increase, while profit after tax settled at N44.98 billion.
Profit before tax came in at N229.10 billion. Its share price currently stands at N45, reflecting cautious investor sentiment as the company accelerates balance sheet clean-up efforts.
Revenue Growth
The Group’s revenue performance was anchored by strong growth in interest income, which rose by 23.63 per cent to N2.96 trillion from N2.40 trillion in the prior year.
Net interest income surged 36.3 per cent year-on-year to N1.9 trillion, supported by enhanced earnings yield of 17.11 per cent and improved margins of 11.0 per cent.
This underscores improved asset repricing and efficient funding structure.
Net fees and commissions also climbed 18.7 per cent to N290.7 billion, driven by higher electronic banking income, letters-of-credit commissions, custodian services, and account maintenance charges reflecting sustained gains from the Group’s digital banking investments.
Profitability
Despite strong revenue expansion, profitability moderated as profit for the year declined compared to 2024, largely due to elevated impairment charges within the commercial banking segment.
The increase in provisioning followed the expiration of regulatory forbearance and aligns with management’s strategic decision to adopt more conservative provisioning standards and accelerate asset clean-up.
Notably, pre-provision operating profit rose by 23.9 per cent year-on-year to N973.3 billion, highlighting the strength of the underlying core business before impairment and fair value adjustments.
Operating Costs
Increased regulatory costs weighed on bottom-line performance during the year.
While these charges impacted net profit, they reflect the Group’s compliance with Nigeria’s financial system stability framework and evolving regulatory expectations.
Management maintains that these expenses reinforce systemic confidence and enhance transparency, even though they compressed net earnings in the short term.
Balance Sheet Growth
Deposit liabilities expanded by 10.0 per cent year-on-year, supported by sustained deposit mobilisation and deeper digital engagement across customer segments.
The Group deliberately reduced foreign currency deposits, reflecting repayment of expensive funding lines and the impact of naira appreciation. This move enhances funding efficiency and mitigates foreign exchange risk exposure.
Gross loans and advances declined marginally, reflecting disciplined credit growth, loan repayments, write-offs, and the translation impact of a stronger naira on foreign currency-denominated facilities. The strategy prioritises asset quality over aggressive expansion.
Commentary
Management described the year as a transitional phase focused on strengthening the balance sheet and reinforcing credit oversight.
While impairment charges increased following the end of regulatory forbearance, the Group intensified recovery efforts and tightened credit monitoring processes.
Outside the commercial banking impairments, performance across other business segments remained resilient, supported by steady customer activity and disciplined execution.
The decline in non-interest income largely due to lower fair value gains following naira appreciation was partially offset by stronger foreign exchange trading income and reduced FX revaluation losses.
Outlook
Looking ahead, the Group intends to sustain disciplined execution of its strategic priorities, focusing on efficiency enhancement, profitability recovery, and deeper digital transformation.
Management plans to pursue selective growth opportunities, including new revenue streams, expansion into additional business verticals, and deeper participation in targeted African markets, consistent with its risk appetite.
With a cleaner asset base, stronger provisioning standards, and improved funding efficiency, the Group appears positioned to translate its robust core operating performance into improved shareholder returns in the coming years.
