From Rotimi Asher, Lagos
First HoldCo Plc is facing renewed scrutiny from investors and shareholders after its share price declined by 8.4% in January 2026, reflecting growing concerns over weak profitability, rising impairment charges and uncertainty around dividend prospects.
The Group’s stock fell from N48.80 on January 2, 2026, to N45.00 per share by January 30, 2026. Market analysts and shareholders have largely attributed the slide to the Group’s unimpressive performance in its unaudited annual results for the year ended December 31, 2025, despite headline growth in gross earnings.
The recent dip marks a sharp contrast to the strong rally recorded in 2025, when First HoldCo delivered a capital gain of 69.8% year-on-year. The stock price rose from N28.20 per share in January 2025 to N47.90 by December, rewarding long-term investors and reinforcing optimism about the Group’s recovery strategy. However, the latest performance has raised fears that shareholders may once again be denied dividends, a situation that has historically strained investor confidence.
In its unaudited financial statements, First HoldCo reported gross earnings of N3.4 trillion for the 2025 financial year, representing a 4.8% increase from the previous year. Management said the growth reflected deliberate strategic actions aimed at strengthening the balance sheet, improving asset quality and positioning the Group for sustainable long-term growth.
Net interest income surged by 36.3% to N1.9 trillion, driven by improved earnings yield of 17.11% and stronger net interest margins of 11.0%. Net fees and commissions also grew by 18.7% to N290.7 billion, highlighting the resilience of the Group’s core banking operations and the benefits of sustained investment in digital banking platforms.
Despite these gains, profit for the year declined significantly compared with the prior period, largely due to higher impairment charges in the commercial banking segment. According to the Group, the spike in impairment reflected a conscious decision to accelerate balance-sheet clean-up following the end of regulatory forbearance and to adopt more stringent provisioning standards in line with evolving regulatory expectations.
Management described the move as painful but necessary, arguing that it enhances transparency, strengthens investor confidence and lays the foundation for improved profitability in future periods. However, the market reaction suggests that investors remain uneasy about the near-term implications for earnings and dividends.
Profitability was further pressured by higher regulatory costs, underscoring the financial burden of compliance within Nigeria’s financial system stability framework. Nevertheless, First HoldCo maintained that the underlying performance of its businesses remained strong, pointing to robust pre-provision operating profit and steady growth in customer activity across subsidiaries.
Deposit liabilities rose by 10.0% year-on-year, supported by sustained deposit mobilisation and continued digital innovation. The Group also deliberately reduced its foreign currency deposits, reflecting the repayment of expensive funding and the impact of naira appreciation, which improved funding efficiency and reduced foreign exchange risk.
Gross loans and advances declined marginally during the period as the Group maintained a disciplined approach to credit growth. Loan repayments, write-offs and the appreciation of the naira, which reduced the naira value of foreign currency loans, all contributed to the decline. Management said these measures were designed to build a cleaner, higher-quality loan book capable of supporting future earnings growth.
Non-interest income, however, declined due to lower fair value gains on financial instruments following the naira appreciation in 2025. This was partly offset by stronger foreign exchange trading income and reduced FX revaluation losses. Net fee and commission income benefited from higher electronic banking fees, letters of credit commissions, custodian fees, and account maintenance income.
Excluding impairment charges and fair value gains, pre-provision operating profit rose by 23.9% to N973.3 billion, underscoring the strength of the Group’s core operations. Still, analysts note that impairment remains the single biggest drag on bottom-line performance.
Commenting on the sudden deterioration in performance, David Adonri, Vice Chairman of HighCap Securities Ltd, said the problem appeared to have emerged late in the year. “In the third quarter, everything seemed fine, as if there was no problem. Then suddenly, in the fourth quarter and toward the end of the year, a major issue surfaced”, he said.
The disclosure of impaired assets has reignited debate about asset quality across Nigeria’s banking sector and raised expectations that more banks may report similar challenges as they release their full-year results.
