Analysts Set First Holdco Target Price at N41.75 after Earnings Bump
Analysts at investment firm AAG Capital Limited have set a N41.75 target price for First Holdco Plc, reflecting more than 63% upside potential at the equities market reference price of N24.80.
First HoldCo’s unaudited Q1 2025 results showed a strong performance, with interest income rising 40.2% year-on-year to N625.3 billion, driven by the sustained high-yield environment.
Net loans and advances to customers increased by 4.95% compared to 2024, while interest expense also rose moderately by 18.6% year-on-year to N260.1 billion.
Details from the group’s unaudited financials showed that customer deposits grew by 0.6% over the same period. Overall, net interest income climbed 61% year-on-year to N365.2 billion, up from N226.3 billion in Q1 2024.
First Holdco’s net fee and commission income grew moderately, up 22.5% year-on-year to N64.1 billion, according to details from the group’s unaudited numbers.
Analysts at AAG Capital Limited said the main drivers of the year-on-year growth were strong growth in credit-related fees, custodian fees, funds transfer & intermediation fees, and letter of credit commission & fees.
Other Income—net gains on financial instruments held at fair value through profit or loss account – recorded a sharp decline to a loss of N47.8 billion from N288.8 billion income recorded in Q1 2024, thereby impacting non-interest income.
In Q1-2025, First Holdco non-interest income dropped by 60% to N104.1 billion from N260 billion in Q1 2024. FX gains came in at N80.48 billion (from FX trading income & revaluation gains). Operating Expenses (OPEX) grew moderately, up 16% year-on-year to N245.3 billion, despite a decision to yank off merchant bank business
The year-on-year growth in operating expenses, compared with a 3.9% year-on-year decline in total operating income, led to a significant deterioration in the bank’s cost-to-income ratio.
In the period, First Holdco’s cost-to-income ratio worsened to 52.3%, a significant spike of 900 basis points above 43.3% reported in Q1 2024. Reflecting the moderated asset quality challenge, analysts highlighted that the group’s total impairment charge declined by 11.6% to N37.25 billion in Q1 2025 from N41.93 billion in Q1 2024.
The reported loan impairment charge brought the Q1 2025 annualised cost of risk to 10.8%, according to analysts at AAG Capital Limited. Overall, First Holdco pretax profit declined by 20.4% year-on-year to N186.5 billion while profit after tax declined 17.9% year-on-year to N167.4 billion in Q1 2025. #Analysts Set First Holdco Target Price at N41.75 after Earnings Bump#
