First HoldCo Plc Q2 2026: Doubling Profit While Managing the Core Banking Trade-Off
For First HoldCo Plc, the first half of 2026 was a clear test of what modern banking is meant to do: grow earnings while keeping enough liquidity on hand, protecting solvency, and staying within tightening regulatory lines. The group’s unaudited results show it managed that balance. Profit for the six months to June hit N526.13 billion, an 81.6% increase from N289.77 billion a year earlier, and earnings per share rose to N11.74 from N6.84. That performance came in an environment of high funding costs, volatile exchange rates, and margin pressure, which makes the outcome more significant.
The operating environment was not supportive of traditional lending margins. Interest expense remained elevated at N518.92 billion, and as a result net interest income slipped 2.8% to N879.13 billion despite growth in assets. What carried profitability was the group’s ability to lean on other lines of business. Fee and commission income rose 29.5% to N178.51 billion, reflecting stronger transaction volumes and a broader service base. More importantly, trading and investment activities reversed sharply, moving from a N53.67 billion loss in H1 2025 to a N65.79 billion gain. Gains on sale of securities added another N60.62 billion, and other operating income jumped more than tenfold to N136.67 billion. At the same time, impairment charges fell 37.4% to N116.14 billion, suggesting asset quality has stabilized even as rates stayed high. The combined effect pushed operating profit above N651.98 billion, more than double the prior year.
Those numbers matter because they speak to liquidity and solvency, not just earnings. Customer deposits, the cheapest and most stable form of funding, grew 16.2% year-to-date to N21.93 trillion and were used to fund growth in loans and investment securities without increasing reliance on borrowed money. In fact, total borrowings were cut in half to N964.83 billion. Cash and balances with central banks stayed strong at over N5 trillion, and operating cashflow turned positive at N502.01 billion compared to a N1.01 trillion outflow last year. On the capital side, equity attributable to owners rose to N3.56 trillion, supported by retained earnings that more than doubled to N921.72 billion and a N44.53 billion capital raise during the period. With a free float value of N1.44 trillion, the group also remains compliant with NGX Premium Board requirements. That stronger capital base is timely given the CBN’s June 2026 exposure drafts proposing a 20% buffer at holding company level. First HoldCo’s build-up in equity suggests it is positioning to meet that rule without having to dilute shareholders excessively.
Underlying all of this is the fundamental risk of banking: maturity transformation. Banks take short-term deposits and turn them into long-term loans and securities because that is where the profit is. First HoldCo’s balance sheet reflects it. Loans to customers rose to N9.51 trillion and investment securities grew 32.5% to N9.23 trillion, both relatively long-dated. They were funded largely by N21.93 trillion in deposits that can be withdrawn quickly. That mismatch creates the earnings, but it also creates exposure. The drop in net interest income shows how quickly funding costs can rise and squeeze margins. The N244.76 billion loss in other comprehensive income, driven by N161.97 billion in fair value losses on debt securities and N83.46 billion in FX translation losses, shows how the value of long assets falls when rates rise or the naira weakens. None of that went through profit, but it reduced equity and is a reminder that the trade-off is always present.
First HoldCo appears to have managed that risk by keeping liquidity ample and by diversifying income so it is less dependent on the spread between deposits and loans. The swing in trading gains and the growth in fees provided a cushion when interest income weakened. Lower impairments also suggest the loan book is holding up. The share price at N56.05, more than double a year ago, indicates the market sees value in that approach.
In total, the H1 2026 results present First HoldCo as a group that delivered on the objective of maximizing profitability without sacrificing liquidity or solvency, and did so while operating within an increasingly demanding regulatory framework. The challenge ahead will be to sustain non-interest income momentum, manage the valuation swings that come with a large securities portfolio, and absorb any additional capital requirements the CBN may impose. For now, the results show a bank navigating the inherent risks of borrowing short and lending long, and using the breadth of a holding company structure to do it.
