Despite a windfall in interest income, First HoldCo Plc ended the first half of 2025 with a sobering result: profit after tax fell by 20.7% to ₦289.8 billion.
Just a year ago, the group had posted ₦365.3 billion, buoyed by fair value gains that have since vanished in the face of volatile markets and tighter monetary policy.
At first glance, the group appeared to perform well.
Interest income jumped by 51.7% to ₦1.44 trillion, driven by Nigeria’s persistently high-yield environment.
Analysts at CSL Stockbrokers credited this surge to continued monetary tightening.
As a result, interest expenses also climbed by 23% to ₦532.6 billion.
Nevertheless, the group increased its net interest income by 75.7% to ₦904.8 billion, reinforcing interest income as its primary earnings engine.
Market Losses Erode Gains
However, as the numbers unfolded, major challenges began to emerge.
While lending activities thrived, First HoldCo suffered substantial losses from market-linked income.
Specifically, the group reported ₦53.7 billion in net fair value losses on financial instruments, a dramatic turnaround from the ₦432.2 billion gain it had booked a year earlier.
This setback stemmed from sharp valuation losses triggered by volatile capital markets and exchange rate shifts.
Meanwhile, the group clawed back some value through foreign exchange revaluation, which delivered a ₦73.5 billion gain.
This marked a significant recovery compared to the ₦165 billion loss recorded in the previous year.
At the same time, First HoldCo strengthened its fee and commission income by 29.7% to ₦168.6 billion, thanks to strong growth in digital banking and transaction services.
However, rising fee-related costs eroded much of the benefit.
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In addition, the group grew its dividend income by 27% year-on-year, reaching ₦10.2 billion.
Net fee and commission income also rose by 25.1% compared to the previous year, as most income lines posted growth—excluding credit-related fees, brokerage, and fund management fees.
Costs And Impairments Climb
On the cost front, the group responded to a growing loan book and heightened credit risk by more than doubling its impairment charges to ₦185.4 billion, up from ₦93 billion.
Simultaneously, inflationary pressure and increased business activity pushed total operating expenses up by 23.5% to ₦552.8 billion.
Personnel costs rose to ₦170 billion, while other operational expenses expanded to ₦347.4 billion.
Consequently, pre-tax profit declined by 13.6% to ₦356.1 billion, compared to ₦412 billion in the same period last year.
After applying a tax charge of ₦72.4 billion, First HoldCo recorded a net profit of ₦289.8 billion.
Weakened Cash Flow, Stronger Equity
Turning to the balance sheet, the group boosted its total assets by 2.5% to ₦27.2 trillion, up from ₦26.5 trillion at the end of 2024.
It modestly increased customer loans to ₦8.86 trillion and sharply raised its balances with other banks by 45% to ₦4.79 trillion.
Meanwhile, it kept investment securities nearly flat at ₦6.46 trillion.
Furthermore, the group lifted customer deposits by 4.2% to ₦17.9 trillion, reinforcing its liquidity strength.
However, it also raised borrowings to ₦1.75 trillion, reflecting expanded funding activity.
Meanwhile, mark-to-market losses on financial assets caused fair value reserves to plunge to ₦77.7 billion, a steep drop from ₦356.7 billion.
Despite the market volatility, First HoldCo strengthened equity by 5.4% to ₦2.95 trillion, drawing support from retained earnings and a ₦146.7 billion capital raise through a share issue.
This move not only bolstered its capital adequacy but also signalled strong investor confidence.
However, cash flow told a different story.
The group reported negative operating cash flow of ₦1.01 trillion, in stark contrast to the ₦1.2 trillion positive flow it recorded a year ago.
Shifts in working capital and higher interest and tax payments drove this reversal.
Simultaneously, First HoldCo spent ₦154.4 billion on investing activities, while it generated ₦313 billion from financing activities—mostly from new borrowings and the capital raise.
As a result, its cash and cash equivalents declined by ₦852 billion to ₦4.87 trillion by the end of June.
In summary, First HoldCo delivered strong operational income and steady growth across core areas, yet it struggled to offset market-driven losses and rising costs.
The result is a half-year story of resilience tempered by economic headwinds and tightening liquidity.
