First HoldCo Reports Nine-Month Net profit of ₦453.09 billion

First HoldCo reports a mixed financial performance (FIRSTHOLDCO) for the nine months ended 30 September 2025, underscoring the company’s ability to sustain strong growth in its core banking operations despite a challenging macroeconomic environment marked by inflationary pressures, rising impairment charges, and weakening trading income.

For the period, the Group’s pre-tax profit fell by 7.3% year-on-year (y/y) to ₦566.54 billion compared with ₦610.86 billion recorded in the same period of 2024. This decline primarily reflects a sharp rise in credit impairment charges and softer trading and other income. Consequently, net profit dropped by 13.0% y/y to ₦453.09 billion, translating to earnings per share (EPS) of ₦10.82, down from ₦12.43 in 9M 2024.

Despite the overall dip in profitability, FIRSTHOLDCO recorded impressive growth in its interest-related earnings. Interest income surged by 40.4% y/y to ₦2.29 trillion, driven by higher asset yields across both loans and investment securities (up 15.6%). Interest expense rose modestly by 4.3% to ₦791.80 billion, reflecting prudent funding management. Consequently, net interest income jumped by 71.7% y/y to ₦1.50 trillion, supported by wider net interest margins of 10.2% compared with 7.2% in the prior year and an improved cost of funds of 4.9% versus 5.5% in 9M 2024.

However, non-interest revenue proved a weak spot for the Group during the review period. Trading income plunged by 85.8% y/y to ₦47.66 billion (from ₦335.57 billion in 9M 2024) as mark-to-market gains and foreign exchange trading income sharply declined. While fee and commission income rose 24.7% y/y to ₦213.69 billion, boosted by higher transaction volumes and stronger digital channel adoption, the gains were not sufficient to offset the fall in trading revenue. Furthermore, other income dropped by 54.3% y/y to ₦35.57 billion, further softening the non-interest revenue contribution.

On the cost side, inflationary pressures and the Group’s continued investments in technology and personnel drove up expenses. Operating expenses increased by 39.3% y/y to ₦942.67 billion, leading to a higher cost-to-income ratio of 52.4% compared with 46.4% in 9M 2024. The reduced operating leverage underscores the impact of rising costs on margins, even as the company continues to invest for long-term efficiency and digital transformation.

Asset quality was another area of pressure. Loan impairment charges surged by 68.6% y/y to ₦288.92 billion (9M 2024: ₦171.39 billion), pushing the cost of risk to 4.0% from 2.8% in the corresponding period of last year. This reflects higher provisioning requirements amid a cautious macroeconomic outlook and slower repayments in certain sectors.

In terms of balance sheet movements, the Group maintained a stable asset base. Total assets declined marginally by 0.5% year-to-date (ytd) to ₦26.40 trillion (FY 2024: ₦26.52 trillion), as a 2.9% contraction in investment securities offset robust loan expansion. Net loans grew 9.0% ytd to ₦9.56 trillion, while customer deposits advanced 4.2% ytd to ₦17.89 trillion, underlining sustained customer confidence and deposit mobilisation strength.

Nevertheless, profitability ratios weakened on the back of elevated costs and impairments. Return on average equity (ROAE) moderated to 20.2% from 32.3% in 9M 2024, while return on average assets (ROAA) dipped to 2.3% from 3.2%, highlighting reduced efficiency in translating asset growth into earnings.

Management, however, maintained an optimistic outlook. Despite the year-on-year decline in overall earnings, the resilience in core banking income, bolstered by improved asset yields and lower funding costs, remains a positive indicator of long-term growth potential. Analysts retain a target price of ₦49.78 on the stock, representing an upside potential of 58.0% based on its closing price of ₦31.50 as of 31 October 2025. Accordingly, the recommendation on FIRSTHOLDCO shares remains a BUY.

To discuss the unaudited nine-month results and provide further clarity on strategic priorities, First HoldCo will host a question-and-answer teleconference call with analysts and investors on Wednesday, November 5, 2025, at 3:00 pm Lagos / 2:00 pm UK / 10:00 am New York / 4:00 pm Johannesburg & Cape Town. Click here to register. SOURCE: CORONATION ASSET MANAGEMENT LIMITED