First HoldCo’s Bold Bet: Can This Banking Thriller End in a Blockbuster Resurgence?

In this environment, banks face a skeptical if cynical public. Rightly so; what with the proclivity for the interest mongers to duck festering positions behind spruced up figures. Not so for First Holdco ; it is cutting a new image for itself. This is as it grapples with the challenge of competing in a harsh environment. The bank is at work, sleeves rolled-up, digging a trench for bad and delinquent loans and entrenching good governance with full disclosure and this has affected bottom line. It is the sinecure for a stronger balance sheet in the coming year management insists.

True to form, First HoldCo’s 2025 financial report is like a plot twist in a Nigerian banking thriller – who knew tackling bad loans head-on c ould be both a bold move and a box office hit? The bank’s decision to prioritize transparency and address its non-performing loans has paid off, with gross earnings soaring to N3.4 trillion, a 4.8% increase, driven by a 36.3% jump in net interest income to N1.9 trillion. However, profit after tax took a hit, dropping to N44.98 billion due to a record N748.13 billion impairment charge. On the bright side, deposit liabilities grew by 10 to N18.90 trillion, reflecting strong customer confidence. The bank’s focus on efficiency, innovation, and selective growth is expected to drive future value creation, making this a pivotal year for First HoldCo’s resurgence in Nigeria’s competitive banking landscape.

Femi Otedola, Group Chairman of First Bank Holdings, has defended the bank’s decision to write off N748bn in bad loans, saying it’s a strategic move for long-term stability despite a 92% profit drop. The write-off aligns with the Central Bank of Nigeria’s directive to address non-performing loans transparently. Otedola noted that the bank’s core operations remain robust, with N2.96tn in interest income and N1.91tn in net interest income, providing capacity to absorb the losses. He expressed optimism about the bank’s prospects, saying the cleanup positions First Bank favorably for recapitalisation and future

A detailed analysis of First HoldCo’s balance sheet management for the financial year 2025 indicates a focus on sustainable growth, balancing earning asset expansion with strategic investments in fixed assets

This year, Gross earnings trudged 4.8% to N3.4 trillion in 2025, driven by a 23.65% increase in interest income to N2.96 trillion. 38 on the strength of its over 820 business locations across Africa, with a significant presence in Nigeria. The bank’s branch network is complemented by an agent banking network with over 233,500 locations across Nigeria as of 2024 branches spread across the country. The significant paced growth seems to fit the steep rise in its fixed assets and earning assets.First HoldCo’s 2025 financial statements reveal a notable expansion in earning assets and a strategic focus on fixed assets. Let’s dive into the details.

The bank’s earning assets, which drive revenue generation, showed significant growth. Loans and advances to customers increased 3.37% to N9.06 trillion, indicating a robust lending portfolio. Investment securities also grew 10.11% to N7.20 trillion, showcasing the bank’s efforts to diversify its income streams. On the fixed assets front, Property and equipment rose 23.53% to N274.46 billion, suggesting investments in infrastructure and technology to support growth. Intangible assets, however, declined 14.14% to N34.47 billion

 If anything, a racy earning assets figure should result in more robust earnings except may be spreads or the difference between interests earned and interests paid are not quite attractive. It could also be because commissions from non interest dependent transactions are dropping.

But these two indicators are on the rise at First Holdco .The bank’s interest income grew 23.65% YoY to N2.96 trillion, showcasing a robust lending portfolio. The interplay between interests paid and those received ushered a net interest income that rose by 36.3% to N1.9 trillion in 2025, driven by improved earnings yields and margins of 17.11% and 11.0%, respectively. This growth reflects the bank’s strong lending portfolio and strategic positioning

However , this growth was unfortunately offset by higher impairment charges, which jumped 75.48% YoY to N748.1 billion, reflecting increased provisions for loan defaults. First HoldCo’s ₦748 billion impairment charge in FY 2025 is a strategic move to address legacy bad loans and position itself for future growth. The charge is largely driven by the Central Bank of Nigeria’s (CBN) regulatory reset and the end of forbearance on COVID-impacted loans.

The CBN’s June 2025 circular requiring banks to migrate restructured facilities to Stage 2/3 by year-end has prompted banks to take proactive measures. First HoldCo’s move is consistent with industry trends, as peers like Access Bank, Zenith Bank, and GTBank have also recorded elevated provisions. The impairment charge reflects the minimum mandated by IFRS 9 ECL models, incorporating forbearance exit and macro deterioration. The Group’s Regulatory Risk Reserve increased by only ₦248 million to ₦22.9 billion, indicating that IFRS 9 provisions substantially exceeded prudential minimums. This suggests that management took an aggressive stance to clean up the balance sheet. The Q4’2025 concentration of the impairment charge is likely a deliberate move to present a ‘clean’ balance sheet to incoming shareholders and the 2026 capital markets. This strategy mirrors approaches used by Access Bank and UBA in the past, where new equity capital was used to absorb legacy provisions

With the above spoilers , First HoldCo’s 2025 financial results paint a picture of a bank navigating challenging times. A 71.18% decline in pre-tax profit to N229.097 billion is certainly eye-catching. First HoldCo’s profit after tax for the full year 2025 is N44.98 billion, a significant decline from N677 billion in 2024. This drop is largely attributed to a substantial impairment charge of ₦748 billion, aimed at strengthening the bank’s balance sheet and addressing legacy bad loans as well as the increase in operating expenses.

The operating expenses. driven by regulatory costs, advertising, and personnel expenses, should be viewed in the context of strategic decisions and inflationary pressures. The bank’s management has demonstrated discipline in managing costs, with personnel expenses increasing by 25.10%, below Nigeria’s projected 2025 CPI inflation rate.

Overall, First HoldCo’s impairment charge is a bold move to address legacy, bad loans and position the bank for future growth. The bank’s proactive approach to compliance and transparency will likely be viewed positively by investors and regulators, setting the stage for sustained growth and profitabilit

Moreover , digging deeper reveals some positives, the bank’s focus on digital transformation, selective growth, and risk management is expected to position it for long-term success in a rapidly evolving banking landscape.

First HoldCo is going all-in on digital transformation, investing heavily in its digital banking platforms to enhance customer engagement and efficiency. This strategic move is expected to improve the bank’s competitiveness in Nigeria’s rapidly evolving banking landscape. By leveraging technology, First HoldCo aims to provide seamless and personalized services, increase customer satisfaction, and drive revenue growth.

First HoldCo is adopting a selective approach to growth, focusing on expanding into targeted African markets and exploring additional business verticals. This approach allows the bank to diversify its revenue streams, reduce dependence on a single market, and capitalize on emerging opportunities. By being selective in its growth initiatives, First HoldCo aims to maximize returns while minimizing risks.

First HoldCo is strengthening its risk management framework, intensifying recovery initiatives, and adopting more aggressive provisioning standards. This proactive approach has resulted in a record N748.13 billion impairment charge, which may impact short-term profitability but will ultimately strengthen the bank’s balance sheet and improve asset quality. By prioritizing risk management, First HoldCo is building a more resilient and sustainable business model.

First HoldCo is optimizing its capital structure, raising capital through rights issues and private placements to support growth and meet regulatory requirements. This strategic move will provide the bank with the necessary resources to pursue its growth initiatives, expand its operations, and increase shareholder value. By optimizing its capital, First HoldCo is positioning itself for long-term success and sustainability.

First HoldCo is focused on enhancing operational efficiency, driving profitability through disciplined execution and cost management. By streamlining processes, reducing costs, and improving productivity, the bank aims to increase its competitiveness and deliver better returns to. This strategic focus on efficiency will enable First HoldCo to navigate the challenging banking environment and achieve its growth objectives.