April 23, 2025/Cordros Report

First HoldCo Plc (FIRSTHOLDCO) recently released their 2024FY audited financial statements, recording a 115.4% y/y increase in earnings per share to NGN18.31 (2023FY: NGN8.53). We attribute this to the broad-based growth across both core (+155.9% y/y) and non-core (+27.7% y/y) income lines. The board proposed a final dividend of NGN0.60/s (2023FY: 0.40/s), translating to a dividend yield of 2.5%, based on the closing price of NGN23.75/s (April 22).

FIRSTHOLDCO reported a 155.9% y/y increase in interest income to NGN2.40 trillion in 2024FY, surpassing the NGN2.00 trillion mark for the first time. The surge in interest income was primarily driven by higher yields in the fixed income market and a 66.0% y/y expansion in earning assets to NGN18.61 trillion. In nominal terms, the group saw significant growth across key income lines, including loans and advances to customers (+123.6% y/y to NGN1.36 trillion), investment securities (+205.3% y/y to NGN850.46 billion), and advances to banks (+279.2% y/y to NGN183.26 billion).

Interest expenses also surged by 155.2% y/y to NGN996.12 billion, driven by higher costs on deposits from customers (+144.4% y/y to NGN615.15 billion) and financial institutions (+301.7% y/y to NGN210.12 billion), despite an improved funding mix (CASA 2024FY: 86.2% | 2023FY: 81.2%). Similarly, borrowing costs rose by 95.6% y/y to NGN169.01 billion. Consequently, net interest income (ex-LLE) grew by 203.4% y/y to NGN975.02 billion after accounting for credit impairment charges of NGN426.29 billion.

The group’s non-interest income grew by 27.7% y/y to NGN755.61 billion, driven primarily by higher gains from net fees & commission income (+30.9% y/y to NGN244.89 billion) and FX trading (+324.1% y/y to NGN36.49 billion). These gains were sufficient to offset losses from foreign exchange revaluation (NGN90.97 billion) and sales of investment securities (NGN48.06 billion).

Further down, operating expenses increased by 67.7% y/y to NGN934.16 billion, primarily driven by an increase in personnel expenses (+75.4% y/y to NGN308.47 billion), AMCON levy (+46.4% y/y to NGN74.87 billion) and NDIC premium (+69.7% y/y to NGN47.67 billion). Considering the group’s operating income (+89.5% y/y) grew faster than OPEX, the cost-to-income ratio (ex-LLE) settled lower at 54.0% (2023FY: 61.0%).

Profitability was stronger in 2024FY as PAT was 113.7% y/y higher at NGN663.49 billion, after accounting for the tax expenses of NGN132.98 billion – Windfall levy: NGN33.49 billion.

FIRSTHOLDCO is scheduled to hold its earnings call today at 3:00 PM WAT – Register here

Comment: FIRSTHOLDCO delivered a strong 2024FY performance, aligning with our expectations as both funded and non-funded income expanded. We particularly like the HoldCo’s impressive asset yield (2024FY: 15.5% | industry average: 13.0%), underscoring the group’s robust repricing ability amid the elevated interest rate environment. Looking ahead to 2025E, while we anticipate a moderation in fixed income yields by year-end, we still expect core income growth, supported by the continued expansion of earning assets. Our estimates are under review.