First HoldCo Plc delivered a mixed financial performance in the first quarter (Q1) 2025 as profit after tax of ₦171.1 billion dipped 17.8% from ₦208.1 billion posted in Q1 2024.
The decline was due to weaker performance in trading income and higher operating expenses despite strong growth in net interest income and foreign exchange gains.
Interest Income Remains Key Growth Driver
Interest income surged 40.2% year-on-year to ₦625.3 billion, up from ₦446.1 billion in Q1 2024. This growth reflects improved asset yields and continued momentum in loan book expansion across both corporate and retail banking segments.
Interest expense also increased by 18.6% to ₦260.1 billion, largely due to elevated funding costs in a tight liquidity environment.
Despite this, net interest income rose sharply by 61.0% to ₦365.2 billion, demonstrating robust asset repricing and strong margin management.
Impairment Charges and Risk Caution
Impairment charges for credit losses declined by 11.2% to ₦37.3 billion, indicating an improvement in asset quality or a more stable credit risk environment.
As a result, net interest income after impairment rose to ₦327.9 billion, compared to ₦184.9 billion a year earlier — a strong 77.3% increase.
This performance underscores effective risk provisioning and a healthier loan book across FirstBank and its subsidiaries.
Non-Interest Income Dragged by Trading Losses
Net fee and commission income rose by 22.4% to ₦64.1 billion, up from ₦52.4 billion, driven by increased digital banking usage, higher transaction volumes, and retail service fees.
However, non-interest income was significantly impacted by losses in trading activities. The Group recorded a ₦47.9 billion net loss on financial instruments at fair value through profit or loss (FVTPL), compared to a gain of ₦288.8 billion in Q1 2024 — a swing of over ₦336 billion.
While foreign exchange gains of ₦80.5 billion helped cushion this impact, the absence of substantial investment security sales and the decline in dividend income further weakened non-interest income performance.
Operating Expenses Rise Across Board
Total operating expenses rose during the quarter as personnel expenses increased by 4.6% to ₦67.0 billion while depreciation and amortisation grew by 21.3% to ₦16.4 billion.
Other operating expenses surged to ₦161.9 billion, up from ₦133.2 billion in Q1 2024 — reflecting inflationary pressures, higher energy costs and regulatory compliance costs across the group.
Despite the cost escalation, First HoldCo still managed to post an operating profit of ₦186.7 billion, although this was 20.2% lower than the ₦234.2 billion recorded in Q1 2024.
Profitability and Shareholder Returns
Profit before tax stood at ₦186.5 billion, down from ₦234.2 billion a year earlier. After tax, profit from continuing operations was ₦167.4 billion while discontinued operations contributed ₦3.7 billion to bring total profit for the period to ₦171.1 billion.
Profit attributable to equity holders was ₦169.5 billion while non-controlling interests accounted for ₦1.6 billion.
Basic earnings per share (EPS) declined to ₦4.72 from ₦5.76 and diluted EPS dropped to ₦4.05 from ₦5.73.
Outlook and Strategic Considerations
While Q1 2025 reflects operational resilience in the face of economic headwinds, the sharp reversal in trading income and higher costs highlight vulnerabilities in the Group’s earnings mix.
With interest income growth offset by market volatility and cost inflation, First HoldCo may need to focus more on sustainable non-interest income, cost control, and asset-light innovations across digital and fintech segments.
Nevertheless, the Group’s strong interest margins and stable asset quality provide a solid foundation for performance recovery in subsequent quarters, especially if macroeconomic conditions stabilize.
