FirstHoldco Profit Falls 71% As Loan Impairments Reset Earnings

FirstHoldco Plc released its unaudited consolidated results for the year ended December 31, 2025, reporting a pre-tax profit of N229.10 billion, a 71.18 percent decline from N796.46 billion in 2024. Profit after tax fell more sharply, down 93.36 percent to N44.98 billion from N677.01 billion. The contraction occurred despite continued balance-sheet growth and rising interest income, underscoring the weight of impairment charges taken during the year.

DECISION HIGHLIGHT
Company: FirstHoldco Plc
Core Banking Subsidiary: First Bank of Nigeria Limited
Reporting Period: FY 2025 (unaudited)
Pre-Tax Profit: N229.10bn, down 71.18% YoY
Profit After Tax: N44.98bn, down 93.36% YoY
Key Charge: N748.1bn total impairment losses
Strategic Context: Post-forbearance asset quality cleanup ahead of recapitalisation

DECISION MEMO
FirstHoldco’s 2025 performance reflects a deliberate trade-off rather than an operational collapse. The holding company absorbed N748.1 billion in impairment losses, of which N710 billion related to loans and advances to customers. This single line item explains most of the profit erosion. The timing is not coincidental. Nigeria’s banking regulator has been unwinding COVID-era and post-crisis regulatory forbearance, forcing banks to recognise credit weaknesses that had been deferred.

The scale of provisioning was front-loaded. In the fourth quarter alone, impairment losses on loans and advances reached N442.6 billion. This compressed full-year earnings but reset asset quality metrics going into a tighter regulatory cycle. The effect flowed directly through net interest income, which declined by 36.47 percent year on year once impairments were netted, even though gross interest generation improved.

On the operating side, the core franchise showed resilience. Interest income rose 23.65 percent to N2.96 trillion, while interest expense increased by a slower 5.78 percent to N1.05 trillion. This spread dynamic indicates that lending activity and pricing power held up, even as provisioning overwhelmed reported profitability. In absolute terms, net interest income still stood at N1.91 trillion, materially higher than levels seen two years earlier.

The balance sheet adds context. Total assets expanded modestly to N27.06 trillion, supported by growth in loans and advances to customers, which rose 3.37 percent to N9.06 trillion, and investment securities, up 10.11 percent to N7.20 trillion. Customer deposits increased by 10.02 percent to N18.90 trillion, confirming that funding stability was not impaired by the earnings shock.

Crucially, FirstHoldco has confirmed that its flagship subsidiary has already met the N500 billion minimum capital requirement set by the Central Bank of Nigeria ahead of the March 2026 deadline. Sixteen banks have reportedly crossed this threshold. This positions FirstHoldco as an early mover, albeit one that chose to pay for balance-sheet credibility through near-term earnings compression.

DATA BOX
Pre-Tax Profit: N229.10bn (▼71.18% YoY)
Profit After Tax: N44.98bn (▼93.36% YoY)
Interest Income: N2.96tn (▲23.65% YoY)
Interest Expense: N1.05tn (▲5.78% YoY)
Net Interest Income: N1.91tn (▼36.47% YoY)
Net Impairment Losses: N748.1bn (▲75.48% YoY)
Loans and Advances: N9.06tn (▲3.37% YoY)
Customer Deposits: N18.90tn (▲10.02% YoY)
Total Assets: N27.06tn (▲2.04% YoY)
Equity: N3.21tn (▲15% YoY)

WHO WINS / WHO LOSES
Winners:
Regulators, who gain clearer visibility into asset quality as legacy risks are recognised.
Long-term investors, if the cleanup translates into more predictable earnings post-recapitalisation.

Losers:
Short-term earnings-focused shareholders, as distributable profit has been sharply reduced.
Return-on-equity metrics, which are distorted by heavy provisioning.

POLICY SIGNALS
The results highlight the real cost of ending regulatory forbearance. Nigerian banks are being compelled to recognise credit risk more transparently ahead of higher capital thresholds. This improves systemic resilience but concentrates pain into single reporting periods, creating volatile earnings profiles.

INVESTOR SIGNAL
FirstHoldco is effectively asking the market to look beyond 2025 headline earnings. The confirmation that its core bank has met the N500 billion capital floor is a stabilising signal. The investment thesis now depends on whether impairment charges normalise and whether stronger interest income converts into sustainable net profit.

RISK RADAR
Residual credit risk remains elevated in a fragile macroeconomic environment. Any further deterioration in borrower quality could extend the provisioning cycle. Rising operating and funding costs also threaten margin recovery. Finally, sector-wide recapitalisation could tighten liquidity and valuation multiples, even for institutions that have already met regulatory benchmarks.

FirstHoldco’s 2025 result is best read as a reset year. The balance sheet has been fortified, but at a high earnings cost. The next reporting cycle will reveal whether this reset marks the end of legacy drag, or merely the first stage of a longer repair process.