H1 2025: First HoldCo balance sheet expands but impairments, FX losses weigh on profits

By Seun Ibiyemi

First HoldCo Plc delivered a mixed financial performance in the first half of 2025, creating a narrative of two halves, a robust strengthening of fundamentals and asset expansion, countered by significant operating pressures and a sharp decline in bottom-line earnings.

As the institution accelerates efforts to exit regulatory forbearance, its H1 2025 results highlight substantial progress in reinforcing capital buffers, even as it grapples with surging impairments and a temporary collapse in non-interest income streams.

Interest booms, trading plunges

The Group’s top-line performance revealed a divergence in income sources. Interest income surged by 51.67% to ₦1.44 trillion (up from ₦947.69 billion in H1 2024). This growth was fueled by an aggressive expansion in loans and advances (contributing ₦546.15 billion) and robust investment income (₦223.47 billion), as the lender capitalised on a high-yield environment.

However, this gain was heavily eroded by a severe downturn in non-interest income, which plunged by 112.42% to a loss of ₦53.67 billion, a stark contrast to the ₦432.20 billion gain recorded in the prior year. 

This decline was largely attributed to negative fair-value adjustments on financial instruments (FVTPL), exposing the Group’s sensitivity to market volatility.

Furthermore, impairment charges nearly doubled to ₦185.40 billion (from ₦92.99 billion). This spike underscores management’s conservative credit-risk posture as it cleans up the books in preparation for full regulatory compliance.

Consequently, profitability took a hit:

•Profit Before Tax (PBT): ₦356.15bn (–13.55%)

•Profit After Tax (PAT): ₦283.77bn (–21.23%)

•Earnings Per Share (EPS): Declined to ₦6.84 from ₦10.11.

Balance sheet: Resilient and expanding

Despite profit headwinds, First HoldCo’s balance sheet demonstrated significant resilience. Total assets climbed to ₦27.2 trillion as of June 30, 2025, while customer deposits grew by 16.51% to ₦20.72 trillion, signaling sustained consumer confidence and an expanding retail footprint.

Shareholder value was bolstered by a 24.09% increase to ₦2.75 trillion, driven by a 45.35% surge in retained earnings and a successful rights issue that lifted share capital to ₦20.9 billion.

Management commentary

Commenting on the results, the Group Managing Director of First HoldCo, Mr. Adebowale Oyedeji, emphasised the Group’s resilience amid a challenging macroeconomic backdrop.

“In the first half of 2025, gross earnings grew to ₦1.7tn, largely on the back of a strong 75.7% year-on-year growth in net interest income to ₦904.8bn. This underscores our ability to capitalise on market opportunities while maintaining a strong focus on profitability,” Oyedeji stated.

Addressing the asset quality concerns, he noted, “The non-performing loan ratio rose to 12.9%, driven primarily by one oil and gas loan and forbearance-related activities. We have taken proactive steps to sustain the resilience of the balance sheet, and the loan book is continuously being de-risked.”

Oyedeji reaffirmed the Group’s commitment to completing the recapitalisation of its flagship subsidiary, FirstBank, well ahead of the March 2026 deadline.

Market performance and valuation

Investors have reacted with cautious optimism. The stock stabilised at ₦34.90 by the end of July 2025, after seeing volatility earlier in the year.

Valuation metrics suggest the stock remains attractive for long-term value seekers:

•P/E Ratio: 3.80x

•P/B Ratio: 0.40x (Undervalued relative to book value)

Outlook

First HoldCo enters the second half of 2025 with a clearer path. While elevated impairment charges and operating expenses (Cost-to-Income ratio rose to 50.5%) remain immediate concerns, the improvement in Net Interest Margin (up to 10.4%) provides a strong buffer.

For investors, the narrative is one of transition, if management can sustain asset growth while normalising credit losses, the Group’s low valuation could offer significant upside as it finalises its capital restructuring.