FirstHoldco Plc, the financial services group that houses Nigeria’s oldest bank, reported a sharp decline in profitability for the first half of 2025. The company struggled with deteriorating asset quality and a year-on-year contraction in its non-interest income, overshadowing an expansion in gross earnings.
Details from its audited financial statement reveal that FirstHoldco posted a more than 22 per cent year-on-year decline in after-tax profit, settling at N283.77 billion at the end of H1 2025, down from N365.30 billion in the comparable period of 2024.
Despite the dip in its bottom line, FirstHoldco’s gross earnings expanded by 16.8 per cent year-on-year to N1.626 trillion from N1.392 trillion delivered in H1 2024. This top-line growth was primarily driven by a sharp rise in net interest income, which climbed by 75.7 per cent year-on-year from N514.93 billion to N904.83 billion. This uptick was largely supported by the high-interest rate environment prevalent in Nigeria, while related interest expenses grew at a comparatively slower pace of 23.1 per cent.
However, the positive momentum in interest-based earnings was severely undermined by a confluence of factors impacting profitability:
Key drivers of profitability decline during the period in review include:
Soaring impairment charges: A more than 99 per cent increase in credit impairment charges against the income statement damaged FirstHoldco’s earnings performance. This reflects a weakening of its asset quality, particularly amidst the Central Bank of Nigeria’s (CBN) decision to end forbearance measures for certain loan categories. FirstHoldco took a N185.40 billion as an impairment charge on loans in the period, which was 99.4 per cent higher than the N92.99 billion charged in the equivalent period in 2024. Analysts noted that the group’s higher provisioning was primarily due to its strategic move to exit the CBN’s forbearance regime, requiring a more conservative approach to loan loss recognition.
Plunge in non-interest income: FirstHoldco reported a sharp year-on-year decline in its non-interest income, a revenue diversification avenue for commercial banks. This segment fell 57.4 per cent year-on-year to N189.55 billion from N444.71 billion in H1 2024. This contraction was largely driven by fair value losses of N69.71 billion, a reversal from the N478.78 billion gain recorded in the prior period. This shift underscores the volatility in financial instruments and the competitive pressures faced by commercial banks in areas like fees and commissions, as they increasingly compete on flexibility and technological innovations across various channels.
Rising operating expenses: While operating income saw a healthy increase, it was outpaced by a substantial rise in operating expenses. FirstHoldco’s operating income grew 4.9 per cent year-on-year to N908.98 billion from N866.66 billion at the end of H1 2024. In contrast, operating expenses rose 40 per cent year-on-year to settle at N552.83 billion from N445.69 billion in the equivalent period in 2024.
The recent performance across key cost and non-interest income lines left FirstHoldco with a pre-tax profit dropping to N356.15 billion halfway through the 2025 year-end, down from N420.97 billion in H1 2024. With a 40 per cent increase in tax expenses, the financial services group’s net income ultimately plunged by 22.3 per cent year-on-year to N283.77 billion from N365.30 billion in 2024, which had been a more favourable year for the elephant-branded financial services company.
