October 23, 2026/Cordros Report
First HoldCo Plc (FIRSTHOLDCO) published its unaudited 9M-26 results, reporting a 54.5% y/y increase in EPS to NGN16.45 (9M-25: NGN10.65). Earnings growth was primarily driven by trading gains on investment securities, FX trading income and financial advisory fees, which more than offset the weakness in core income.
Interest income declined by 8.7% y/y to NGN2.09 trillion (9M-25: NGN2.29 trillion), as lower income from loans and advances to customers (-10.6% y/y) and investment securities (-9.6% y/y) outweighed the 21.5% y/y increase in interest income from loans to banks. The decline in interest income from loans and advances to customers reflected a 1.7% y/y contraction in the loan book (Q3-26: -1.3% q/q) and a lower average earning assets yield of 14.5%, compared with 17.3% in 2025FY.
Meanwhile, interest expense increased by 5.2% y/y to NGN833.00 billion, as a 34.2% y/y increase in interest on customer deposits more than offset declines in interest on deposits from financial institutions (-56.7% y/y) and borrowings (-11.7% y/y). Customer deposits grew by 28.1% y/y to NGN22.91 trillion. Consequently, cost of funds declined to 4.5% (2025FY: 4.9%), reflecting slower growth in interest expense relative to interest bearing liabilities.
Consequently, net interest income declined by 16.0% y/y. Although impairment charges declined by 28.3% y/y to NGN207.10 billion, it increased by 20.0% q/q, contributing to a 13.1% y/y and 20.4% q/q decline in net interest income after loan loss expense. Accordingly, net interest margin pared to 8.7% in 9M-26 (2025FY: 11.3%).
Non-interest income continued to support operating income, surging by 143.6% y/y to NGN724.80 billion. This was driven by a 123.1% y/y increase in gains on investment securities to NGN165.71 billion (9M-25: NGN74.28 billion), largely reflecting a 430.8% y/y (186.1% q/q) surge in trading gains on debt instruments measured at fair value through profit or loss (FVTPL) to NGN136.94 billion. Additionally, foreign exchange trading income increased by 117.5% y/y to NGN70.49 billion (9M-25: NGN32.41 billion). Net fee and commission income also recorded strong growth, rising by 48.1% y/y to NGN316.43 billion, driven largely by a sharp 5,034.3% y/y increase in financial advisory fees. However, non-interest income declined by 18.7% q/q, partly reflecting a 93.4% q/q contraction in non-operating income, driven by lower debt recoveries during the period. Consequently, operating income grew by 17.8% y/y to NGN1.78 trillion but declined by 19.7% q/q.
Meanwhile, operating expenses declined by 8.1% y/y to NGN866.60 billion, driven by lower personnel expenses (-2.8% y/y) and deposit insurance premiums (-16.4% y/y). The combination of strong operating income growth and lower operating expenses supported an improvement in the cost-to-income ratio (ex-LLE) to 43.7% from 52.4% in 9M-25.
Overall, PBT advanced by 60.8% y/y to NGN911.24 billion, while PAT increased by 62.6% y/y to NGN733.61 billion (9M-25: NGN458.08 billion).
Comment: Although FIRSTHOLDCO recorded strong earnings growth in 9M-26, the performance was largely driven by non-interest income, particularly trading gains on investment securities, FX trading income and financial advisory fees, which more than offset the weakness in core income. While lower operating expenses and reduced impairment charges supported the year-to-date performance, the q/q decline in net interest income after loan loss expense and operating income highlights continued pressure on core earnings. Going forward, the sustainability of earnings growth will depend on a recovery in interest income and a stronger contribution from core banking activities. Our estimates are under review.
