First HoldCo PLC Reports Record Impairment Charge but Achieves Gross Earnings of N3.4 Trillion

First HoldCo PLC has released its unaudited financial results for the fiscal year ending December 31, 2025, achieving gross earnings of N3.4 trillion, a 4.8% increase year-on-year (y-o-y). This financial milestone highlights the company’s strategic initiatives to strengthen its balance sheet and improve asset quality, despite facing challenges from higher impairment charges.

The Group’s financial statement revealed a robust 36.3% growth in net interest income, rising to N1.9 trillion, buoyed by enhanced earnings yield and margins of 17.11% and 11.0%, respectively. Net fees and commissions also saw an 18.7% increase, totaling N290.7 billion, indicating a solid revenue-generating capacity across the Group’s core business segments.

However, earnings for the year experienced a downturn compared to the previous year, primarily driven by elevated impairment charges within the commercial banking sector. Management indicated this was a strategic decision aimed at accelerating balance sheet cleanup and adopting more stringent provisioning standards. This move not only enhances transparency but also strengthens investor confidence and aligns with regulatory expectations.

Increased regulatory costs have also impacted profitability. While these charges contributed to financial pressures, they highlight First HoldCo’s commitment to meeting Nigeria’s financial system stability requirements, ensuring systemic confidence. Despite the challenges, the company remains focused on its strong underlying performance.

Deposit liabilities grew by 10.0% y-o-y, attributed to sustained mobilisation efforts and continuous investment in digital banking platforms. This increase reflects strong customer trust and engagement across key segments. The Group noted a deliberate reduction in foreign currency deposits, driven by repayment of costly funding and the appreciating naira, which enhances funding efficiency and mitigates foreign exchange risks.

Gross loans and advances saw a marginal decline, reflecting a disciplined credit growth strategy, improved risk management, and write-offs. This approach is part of First HoldCo’s commitment to maintaining a high-quality asset base, optimizing its portfolio, and enhancing future earnings potential.

While non-interest income declined due to lower fair value gains on financial instruments amid naira appreciation, this dip was mitigated by increased foreign exchange trading income and reduced FX revaluation losses. The rise in net fees and commission income, particularly from electronic banking fees and account maintenance, underscores the success of the Group’s digital innovation efforts.

Management’s strategy to address increasing impairment charges post-regulatory forbearance includes intensifying recovery initiatives and reinforcing credit oversight. Excluding these charges and fair value gains, pre-provision operating profit soared by 23.9% y-o-y to N973.3 billion, showcasing the resilient performance of the core business.

Looking forward, First HoldCo aims to maintain disciplined execution of its strategic objectives, prioritising efficiency and profitability. The Group plans to enhance its digital and data capabilities while sustaining a robust balance sheet to drive value creation for shareholders. Additionally, it will pursue selective growth initiatives, including exploring new revenue streams and deeper participation in targeted African markets, aligning with its strategic vision and risk appetite.

As First HoldCo navigates these challenges and opportunities, its commitment to a cleaner asset base and strong customer engagement positions it well for sustained growth in the evolving financial landscape.