By Seun Ibiyemi
FirstHoldCo Plc has opened the 2026 financial year with a powerful rebound, posting a 72 per cent year-on-year increase in profit before tax to N321 billion in the first quarter of 2026 from N186.47 billion in the corresponding period of 2025.
The performance marks a significant turning point for the financial services group following an aggressive balance-sheet restructuring exercise carried out in 2025, which involved a historic N830 billion impairment charge aimed at resolving long-standing asset quality concerns.
The latest results position FirstHoldCo as the second most profitable lender in Nigeria behind Zenith Bank, reinforcing growing market confidence in the group’s recovery strategy.
Revenue Growth
The group’s earnings expansion was driven largely by strong growth in interest income from customer lending activities and improving non-interest revenue streams.
Interest income from loans and advances to customers rose by 28 per cent year-on-year to N466 billion, reflecting the bank’s increased focus on private sector lending opportunities despite tight liquidity conditions and elevated borrowing costs.
Unlike some peers that rely heavily on income from government securities, FirstHoldCo appears to have strategically deepened its exposure to higher-yield customer lending, allowing it to capture stronger returns during the current high-interest-rate cycle.
The bank also recorded a major improvement in recoveries from previously impaired loans. Loan recoveries surged from N1 billion in Q1 2025 to N19 billion in Q1 2026, representing a 1,570 per cent increase.
The strong recovery performance reflects the benefits of the group’s 2025 balance-sheet cleanup, which enabled recovery units to begin extracting value from legacy bad loans that had already been written off.
Profitability
FirstHoldCo’s profitability metrics showed one of the strongest recoveries within Nigeria’s banking industry.
Profit before tax rose to N321 billion, placing the lender ahead of GTCO, Access Holdings and UBA in absolute profitability for the quarter.
More significantly, the group delivered a post-tax Return on Equity of 31.6 per cent in Q1 2026, compared with just 4.6 per cent at the end of 2025 when earnings were weighed down by impairment charges linked to the balance-sheet reset.
The sharp improvement in ROE highlights the bank’s renewed ability to generate stronger earnings from shareholders’ capital despite the ongoing recapitalisation exercises across the banking sector.
Analysts believe the result signals that FirstHoldCo’s earnings power is expanding faster than the dilution impact of additional capital raising.
Operating Costs
The group also recorded notable efficiency gains during the quarter.
FirstHoldCo’s Cost-to-Income Ratio improved significantly from 53.8 per cent in late 2025 to 45.2 per cent in Q1 2026, placing it ahead of Access Holdings and UBA in operational efficiency.
Although total operating expenses increased by 21 per cent year-on-year to N298 billion, earnings growth outpaced cost expansion, allowing the group to achieve positive operating leverage.
This indicates that management’s restructuring initiatives are beginning to deliver measurable operational benefits despite inflationary pressures and rising operating costs within the Nigerian economy.
Balance Sheet Growth
FirstHoldCo’s total assets stood at N26.8 trillion as of March 2026, representing a slight 2 per cent decline from December 2025.
The modest contraction reflects deliberate balance-sheet optimisation efforts following the group’s aggressive asset cleanup programme in 2025.
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Rather than pursuing rapid balance-sheet expansion, management appears focused on improving asset quality, profitability and capital efficiency.
The cleaner balance sheet now provides the group with greater flexibility to pursue sustainable growth opportunities within the banking and financial services sector.
Liquidity
The group’s liquidity position remained stable during the quarter despite a challenging macroeconomic environment characterised by elevated interest rates and tighter monetary conditions.
Nigeria’s high interest-rate environment, driven by the Central Bank of Nigeria’s 26.5 per cent Monetary Policy Rate, has continued to support banking sector earnings while also increasing funding costs across the economy.
FirstHoldCo’s ability to sustain strong lending growth while maintaining balance-sheet stability suggests improved liquidity management and stronger funding resilience following the 2025 restructuring exercise.
Commentary
The Q1 2026 performance suggests that FirstHoldCo’s controversial decision to absorb massive impairment losses in 2025 may have laid the foundation for a more sustainable long-term recovery.
The balance-sheet reset appears to have removed major legacy constraints that previously weakened profitability and investor confidence.
The group’s leadership in Return on Equity and strong recovery income indicate that management is successfully repositioning the institution toward higher-quality earnings generation.
The results also highlight a broader strategic shift within the Nigerian banking sector, where stronger asset quality and operational efficiency are becoming increasingly important amid regulatory recapitalisation pressures.
Outlook
Looking ahead, analysts expect FirstHoldCo to continue benefiting from improved asset quality, stronger loan recoveries and higher-yield lending opportunities.
The group’s improved profitability profile is also expected to strengthen investor sentiment and potentially narrow the valuation gap between FirstHoldCo and top-tier rivals such as Zenith Bank and GTCO.
While macroeconomic risks including inflation, foreign exchange volatility and regulatory tightening remain key challenges for the banking industry, FirstHoldCo appears to have entered 2026 in a significantly stronger competitive position.
If the current momentum is sustained, the group may emerge as one of the biggest beneficiaries of Nigeria’s evolving banking landscape over the coming quarters.
