First HoldCo Profit Jumps 82% to ₦526 Billion as Trading Gains Offset Weak Interest Income

First HoldCo Plc recorded an 81.6 percent increase in profit to ₦526.13 billion for the six months ended June 30, 2026, as lower impairment charges and substantial growth in trading and other operating income bolstered overall performance.

Profit attributable to shareholders rose by 82.5 percent to ₦522.66 billion from ₦286.40 billion, while earnings per share increased to ₦11.74 from ₦6.84.

The headline result was exceptionally strong. However, a closer assessment shows that the improvement did not originate primarily from traditional interest-generating activities.

Core Interest Income Remains Under Pressure

Interest income declined by 2.7 percent to ₦1.398 trillion from ₦1.437 trillion, while interest expenses moderated by 2.6 percent to ₦518.92 billion.

Consequently, net interest income fell by 2.8 percent to ₦879.13 billion from ₦904.83 billion.

The weakness became more visible in the second quarter. Interest income declined by 14.6 percent to ₦693.60 billion, while net interest income dropped by 18.4 percent to ₦440.37 billion.

This suggests that the group’s underlying interest-earning engine weakened during the latest quarter, potentially reflecting lower asset yields, changes in the loan portfolio or pressure on margins.

The decline is significant because net interest income remains the most recurring and predictable component of banking earnings.

Lower Impairment Charges Support Profit

First HoldCo recorded a 37.4 percent reduction in impairment charges to ₦116.14 billion from ₦185.40 billion.

As a result, net interest income after impairment increased by 6.1 percent to ₦762.99 billion despite the decline in net interest income.

In the second quarter alone, impairment charges fell by almost 49 percent to ₦75.79 billion from ₦148.15 billion.

The reduction added substantial support to earnings and may indicate improved asset quality, stronger recoveries or a lower level of new loan-loss provisions. A complete assessment would, however, require details of the group’s non-performing loans, stage-three exposures and cost of risk.

Non-Interest Income Drives Earnings Expansion

Net fee and commission income increased by 28.7 percent to ₦178.51 billion, demonstrating solid growth in transaction-related banking activities.

Foreign exchange gains stood at ₦44.15 billion, down from ₦73.54 billion. The decline was more than offset by improvements elsewhere.

Gains from the sale of investment securities surged to ₦60.62 billion from ₦7.45 billion, while financial instruments measured at fair value through profit or loss generated a gain of ₦65.79 billion. The same portfolio produced a ₦53.67 billion loss in the first half of 2025.

Other operating income also increased sharply to ₦136.67 billion from ₦13.15 billion.

Overall non-interest income rose to approximately ₦497.08 billion from ₦189.37 billion. The ₦307.71 billion increase was larger than the ₦296 billion rise in operating profit recorded during the period.

This means the earnings expansion was substantially dependent on non-interest revenue, particularly investment-security gains, fair-value movements and other operating income.

While these gains strengthened the result, some may be less predictable than interest income and fee-based earnings. Investors will therefore need more information about the composition of the ₦136.67 billion recorded as other operating income.

Operating Efficiency Improves

Personnel expenses increased by 5.5 percent to ₦180.26 billion, while other operating expenses rose by 11 percent to ₦384.55 billion.

Depreciation, amortisation and impairment expenses increased by 22.1 percent to ₦43.28 billion.

Despite the increase in costs, First HoldCo’s estimated cost-to-income ratio improved to about 44.2 percent from 50.5 percent, reflecting the sharp expansion in non-interest income.

Operating profit rose by 83.2 percent to ₦651.98 billion, while profit before tax increased by 83.5 percent to ₦653.54 billion.

Income tax expense rose to ₦127.28 billion from ₦72.38 billion, leaving an effective tax rate of approximately 19.5 percent.

Investor Outlook

First HoldCo delivered strong profitability, improved operating efficiency and lower credit impairment during the first half of 2026.

Fee income growth also provides evidence that the group’s transaction-banking franchise is expanding.

However, the decline in net interest income—particularly the 18.4 percent second-quarter contraction—deserves attention. A continuation could weaken the quality and sustainability of earnings if trading gains and other exceptional income normalise.

The next set of results will therefore be judged on whether First HoldCo can restore interest-income growth while maintaining lower impairment charges and controlling operating expenses.

For investors, the first-half performance is financially impressive, but the composition of the profit indicates that recurring banking income has not strengthened at the same rate as the headline earnings.