First HoldCo Delivers Blockbuster Performance in H1, Profit Soars 82%
First HoldCo Plc delivered an impressive first half of 2026 financial performance, extending the momentum established in the first quarter and reinforcing confidence that the group is entering a stronger earnings cycle.
The headline figures point to a business benefiting from improved operational efficiency, disciplined cost management, lower credit impairment charges, and expanding non-interest income.
For long-term investors, the results are encouraging.
However, beneath the strong headline numbers remain questions about earnings quality, as a meaningful portion of profit growth continues to benefit from recoveries, fair value adjustments, and foreign exchange gains income streams that may not be consistently repeatable.
The group’s operating performance improved substantially during the period. Operating profit climbed to N331.9 billion from N169.3 billion, while profit before tax almost doubled to N332.4 billion from N169.3 billion.
Even more impressive, profit after tax surged 82% to N526.1 billion from N289.8 billion. The sustained earnings momentum indicates that the restructuring efforts and operational improvements undertaken over the past few years are beginning to translate into stronger shareholder returns.
If the current earnings trajectory is maintained throughout the second half, First HoldCo appears well positioned to approach approximately N1 trillion in full-year profit, implying a return on equity (ROE) close to 30%, a level that would rank among the strongest within Nigeria’s banking industry.
One of the defining features of the second quarter was improved cost discipline. Although interest income declined to N693.6 billion from N812.1 billion, the group successfully managed operating costs while significantly reducing loan impairment charges.
Loan loss provisions declined sharply to N116.1 billion from N185.4 billion, suggesting healthier asset quality and fewer expected credit losses.
This reduction in impairment expenses materially strengthened profitability and reflects improved loan book performance alongside better risk management.
The numbers suggest that First HoldCo is increasingly operating on a cleaner balance sheet, allowing its earnings capacity to better reflect the scale of its franchise. Despite expanding interest-earning assets, core lending profitability softened.
Net interest income declined to N440.4 billion from N539.6 billion, while net interest income after impairment also fell to N364.6 billion from N391.5 billion. This indicates continuing pressure on funding costs and lending spreads despite growth in earning assets.
While customer loans increased from N8.97 trillion to N9.23 trillion, the decline in net interest income suggests that higher funding costs and asset repricing continue to compress margins.
Management will likely need to improve asset yields and optimise funding costs to restore stronger net interest margins in subsequent quarters. One of the strongest positives from the half-year results was the robust expansion of non-interest revenue.
Net fee and commission income increased to N99.6 billion from N74.6 billion, reflecting stronger transaction banking activities and increased customer engagement.
Foreign exchange performance also reversed dramatically, moving from a N6.9 billion loss in the comparable period of 2025 to an N39.7 billion gain in H1 2026.
These improvements significantly boosted total operating income. Nevertheless, investors should recognise that foreign exchange gains and fair value adjustments can be volatile and are generally less predictable than recurring core banking income.
The balance sheet remained healthy and continued to grow. Customer deposits increased from N18.9 trillion to N21.9 trillion, reinforcing the group’s strong liquidity position and customer confidence.
Customer loans expanded moderately to N9.23 trillion, supporting future interest income generation. Investment securities also increased significantly from N6.97 trillion to N9.23 trillion, strengthening income diversification while improving liquidity management.
Total assets expanded to N30.6 trillion from N27.3 trillion, while shareholders’ funds increased from approximately N3.3 trillion to N3.6 trillion. Meanwhile, borrowings reduced substantially, improving leverage and lowering refinancing risk.
Retained earnings more than doubled to N912.7 billion, providing additional capital flexibility for future growth and regulatory capital support. For equity investors, earnings per share increased significantly from N6.84 to N11.74.
The stronger EPS reflects improved profitability and enhances the group’s dividend-paying capacity, subject to regulatory approval and capital management priorities. Growing retained earnings also strengthens intrinsic shareholder value over the longer term.
At approximately N105 per share, First HoldCo carries a market capitalisation of roughly N4.8 trillion.
Investors Recommendation:
First HoldCo’s H1 2026 results represent one of its strongest financial performances in recent years. The bank demonstrated improved operational efficiency, stronger profitability, lower credit costs, expanding customer deposits, growing capital, and better utilisation of its large balance sheet.
Management appears to be executing with greater financial discipline, and the group’s earnings profile increasingly reflects the scale of its franchise.
While the decline in net interest income and the reliance on recoveries, foreign exchange gains, and fair value adjustments suggest that earnings quality still has room for improvement, the overall trajectory remains positive.
For long-term investors, the fundamentals support a “BUY” rating for those seeking exposure to Nigeria’s banking sector. Existing shareholders may consider “HOLDING” their positions to benefit from continued earnings growth and potential dividend enhancement.
Prospective investors should monitor future quarters for sustained improvements in recurring core income, which would further reinforce the investment thesis and justify higher market valuations. #First HoldCo Delivers Blockbuster Performance in H1, Profit Soars 82%#
