How First HoldCo Turned a 16% Drop in Core Interest Income Into a 65% Profit Surge
First HoldCo’s nine-month results for 2026 read like a contradiction that the leadership has managed to resolve. Net interest income, the traditional heart of banking, fell 16.02% to N1.26 trillion from N1.50 trillion a year earlier. Interest income itself was down 8.69% to N2.09 trillion while interest expense rose 5.20% to N833 billion. On that metric alone, the bank should have been heading for a tough year. Instead, profit for the period jumped 65.12% to N744.45 billion and profit before tax rose 60.84% to N911.24 billion. That is not accounting luck. It is strategy.
Faced with a clear weakness, margin compression in a 20% interest rate environment, the group deployed its biggest strength, its deposit franchise and its HoldCo diversification, to neutralize it. While core interest income fell, the management leaned into non-interest lines. Fee and commission income rose 40.92% to N367.06 billion, net fee income jumped 48.09% to N316.42 billion, and crucially, what was a N72.77 billion loss on financial instruments at fair value through profit or loss last year became a N104.58 billion gain this year. Other operating income surged 496% to N142.05 billion. In effect, the leadership replaced lost interest margin with transaction, trading and other operating income that it could control, proving that the HoldCo structure beyond just FirstBank can generate sustainable fees from payments, asset management and insurance cross-sell.
That pivot also neutralized the second weakness, earnings quality concerns. Rather than chase risky loan growth to prop up net interest income, the group kept loan growth modest at 4.77% to N9.39 trillion while deploying its massive liquidity into safer, liquid assets. Customer deposits grew by over N4 trillion in nine months to N22.91 trillion, up 21.33%, and deposits from banks rose 31.89% to N2.66 trillion. Cash and balances with central banks rose to N5.64 trillion. Instead of letting that cash sit as a threat to margins, it was channeled into investment securities, which grew 47.92% to N10.30 trillion, and financial assets at FVTPL, which rose 94.33% to N2.22 trillion. This preserved liquidity and created trading gains while keeping the loan-to-deposit ratio at a conservative 41%, a buffer against asset quality shocks.
On asset quality and funding risk, which remains the main threat for Nigerian banks, the leadership moved decisively to de-risk. Impairment charges were cut 28.32% to N207.09 billion from N288.91 billion, even as the loan book expanded. Borrowings were slashed 38.73% to N1.19 trillion from N1.94 trillion, removing expensive foreign currency obligations at a time of naira volatility. Other operating expenses fell 12.81% and personnel expenses fell 3.38%, showing cost discipline that directly lifted operating profit by 60.70% to N909.36 billion. The combination of lower impairments, lower costs and lower borrowings is how a 13.09% drop in net interest income after impairment to N1.05 trillion still translated into a 60% rise in operating profit.
The most strategic neutralization was on capital. Regulatory pressure from the CBN’s recapitalization directive and the threat of fair value and foreign currency translation losses, fair value reserve down 20.41% and translation reserve down 18.20%, could have eroded capital adequacy. Instead, First HoldCo grew total equity 16.97% to N3.86 trillion, driven by a 182.67% surge in retained earnings to N1.13 trillion from N401.79 billion, and a 9.6% increase in share premium from capital raising. This retained earnings power now gives the group internal capital generation to meet regulatory thresholds without excessive dilution, while the reduced borrowings create headroom to raise cheaper Tier 2 capital if needed.
What the group has done is exploit the opportunity hidden in its own balance sheet. It used excess liquidity not to chase bad loans but to build a securities portfolio that generates trading income. It used its HoldCo license to grow fees faster than any tier-one peer. And it used profitability to fortify equity rather than just pay out. The result is a bank that is less dependent on interest rates for profit, more liquid, less leveraged and better capitalized than it was in December 2025, with total assets up 18.15% to N32.19 trillion.
The challenge ahead is sustainability. Trading gains and other income of N246 billion combined are volatile. The leadership will need to convert its N22.9 trillion deposit base into quality risk assets in productive sectors to rebuild net interest margin. But for 9M 2026, First HoldCo has shown how to neutralize a structural weakness in core income and a market threat of high rates by deploying strengths it already had, a low-cost deposit base, a diversified HoldCo engine, and disciplined cost and risk management.
