July 30, 2025/Cordros Report
First HoldCo Plc (FIRSTHOLDCO) published its unaudited H1-25 financials today, reporting a 22.3% y/y decline in profit after tax to NGN283.77 billion (H1-24: NGN365.30 billion). The decline was driven by a significant contraction in non-core income (-57.4% y/y), which outweighed the impressive growth in core income (+51.7% y/y).
FIRSTHOLDCO recorded a 51.7% y/y increase in interest income to NGN1.44 trillion, supported by stronger earnings on loans and advances to customers (+60.0% y/y), banks (+13.3% y/y), and investment securities (+45.2% y/y). We attribute the robust growth to the still elevated yield environment and modest 8.1% YTD expansion in earning assets. The preceding led to an improved earnings yield of 16.5% in H1-25 (H1-24: 14.1%). Also, FIRSTHOLDCO’s NPL ratio increased to 12.9% (2024FY: 10.2%), indicating the possibility of the reclassification of previously impaired loans under the CBN’s forbearance to Stage 3 loans.
On the funding side, interest expense rose by 23.1% y/y to NGN532.58 billion, reflecting higher funding costs on deposits from financial institutions (+44.4% y/y) and customers (+23.0% y/y). Accordingly, net interest income increased by 75.7% y/y to NGN904.83 billion. After accounting for NGN185.40 billion in credit impairment charges (+99.4% y/y), net interest income ex-LLE rose by 70.5% y/y to NGN719.43 billion, translating to a net interest margin of 10.4% (H1-24: 7.7%). Following the higher provisioning primarily due to the aim to exit the CBN’s forbearance regime, cost of risk increased to 3.9% (H1-24: 2.3%).
The group’s non-interest income declined significantly by 57.4% y/y to NGN189.55 billion, driven by fair value losses of NGN69.71 billion, compared to the gain of NGN478.78 billion in the prior period. This drop undermined gains from FX revaluation (+123.9% y/y), net fees & commissions (+25.1% y/y), investment securities (+16.7% y/y), and FX trading (+0.3% y/y).
Operating income came in at NGN908.98 billion (+4.9% y/y), but was pressured by a 24.0% y/y increase in operating expenses to NGN552.83 billion, on the back of elevated personnel costs (+26.7% y/y), advert & corporate promotions (+30.7% y/y), and NDIC premium (+61.0% y/y). Consequently, the group’s cost-to-income ratio deteriorated to 50.5% (H1-24: 46.9%).
FIRSTHOLDCO reported a 15.4% y/y decline in profit before tax to NGN356.15 billion, while profit after tax fell by 22.3% y/y to NGN283.77 billion following a 39.9% increase in tax expenses.
Management earnings call on Monday, August 4, 2025, at 03:00 PM: Click here to register.
We expect the group’s core income to remain solid, supported by the still elevated yield environment and modest growth in interest-earning assets. However, we reiterate that overall profitability will likely remain pressured by higher provisioning charges and fair value losses. Our estimates are under review.
