July 21, 2026/Cordros Report
First HoldCo Plc (FIRSTHOLDCO) published its unaudited H1-26 results yesterday, reporting a 71.6% y/y growth in earnings per share (EPS) to NGN11.74 (H1-25: NGN6.84). The recovery in earnings was driven primarily by gains on investment securities and lower credit impairment charges, which offset the slight decline in net interest income.
Interest income pared by 2.7% y/y to NGN1.40 trillion (H1-25: NGN1.44 trillion), as lower gains from loans and advances to customers (-1.7% y/y) and investment securities (-7.2% y/y) undermined the higher income from loans to banks (+10.7% y/y).
Similarly, interest expense moderated slightly by 2.6% y/y to NGN518.92 billion as the lower costs on deposits with banks (-60.2% y/y) outweighed higher costs on customer deposits (+22.9% y/y). Accordingly, FIRSTHOLDCO reported a 2.8% y/y decline in net interest income to NGN879.13 billion (H1-25: NGN904.83 billion). Nonetheless, the lower core earnings was more than offset by a 37.4% y/y decline in credit impairment charges to NGN116.14 billion, lifting net interest income after loan loss expenses by 6.1% y/y to NGN762.99 billion.
Non-interest income was the key driver for the earnings recovery, jumping by 162.3% y/y to NGN497.08 billion. The performance was spurred by a 438.1% y/y increase in gains on investment securities to NGN126.42 billion (H1-25: NGN23.49 billion), alongside a 74.6% y/y increase in net foreign exchange trading gains to NGN48.17 billion (H1-25: NGN27.59 billion). Net fee and commission income also remained resilient, rising 28.7% y/y to NGN178.51 billion, while the recovery of previously impaired loans amounting to NGN91.89 billion also supported performance. Consequently, operating income expanded by 38.6% y/y to NGN1.26 trillion.
Meanwhile, operating expenses expanded by 10.0% y/y to NGN608.09 billion driven by higher AMCON (+46.4% y/y), IT maintenance (+46.2% y/y), and personnel (+5.4% y/y) costs. Given the higher growth of operating income relative to OPEX, cost to income ratio ex-LLE improved to 44.1% (H1-25: 50.5%).
Overall, profit before tax advanced by 83.1% y/y to NGN651.98 billion, while PAT increased 85.5% y/y to NGN526.26 billion (H1-25: NGN283.77 billion).
Comment: Although FIRSTHOLDCO reported a strong recovery in earnings, the improvement was driven largely by non-core income, particularly investment gains and the recovery of previously impaired loans amounting to NGN91.89 billion, rather than by core banking operations. While additional recoveries could provide further support to earnings in the near term, the sustainability of this performance will depend on a stronger contribution from core banking activities. Nonetheless, management indicated that the group’s capital adequacy ratio has been restored to 16.7% (2025FY: 11.0%), which, if sustained, should support a resumption in risk asset growth and improve the quality of earnings over the medium term. In addition, the planned NGN235.00 billion capital raise should further strengthen capital buffers and could support the resumption of dividend payments. Our estimates are under review.
