H1 2025: First HoldCo PBT drops 13 percent

First HoldCo Plc has reported a 13 percent decline in profit before tax (PBT) for the first half of 2025, despite recording significant revenue growth, as escalating impairment charges and rising operational costs weighed heavily on profitability.

The banking giant’s mixed performance reflects the challenging operating environment facing Nigeria’s financial sector, with robust interest income growth of 51.6 percent offset by a staggering 99 percent surge in impairment charges for credit losses.

Financial Performance Breakdown

Interest income rose impressively from N947.69 billion in H1 2024 to N1.437 trillion in H1 2025, representing a 51.6 percent increase that underscores the bank’s ability to capitalize on Nigeria’s high interest rate environment.

However, impairment charges for losses nearly doubled, jumping 99 percent from N92.98 billion to N185.39 billion, reflecting heightened credit risk concerns and more conservative provisioning strategies in the current economic climate.

Net fee and commission income provided some relief, increasing 22 percent from N129.92 billion to N158.57 billion, demonstrating the bank’s success in diversifying revenue streams beyond traditional lending.

Personnel expenses climbed 26.6 percent from N134.19 billion to N169.98 billion, reflecting both inflationary pressures and strategic investments in human capital amid the bank’s digital transformation drive.

The institution’s total assets reached N27.199 trillion, positioning it among Nigeria’s largest financial institutions by asset size.

Strategic Priorities Remain Unchanged

Despite the profit decline, First HoldCo management has reaffirmed its commitment to completing the recapitalization of FirstBank well before the March 2026 deadline and achieving full resolution of forbearance loans by financial year-end 2025.

“Our strategic focus remains accelerating digital transformation, enhancing the customer journey, driving sustainable long-term growth through partnerships, increasing operational excellence and maintaining disciplined risk asset governance and oversight,” the bank stated in its results commentary.

The management team emphasized confidence in their strategic direction, stating: “We are committed to our strategic goals and are confident in our ability to deliver optimal value to our shareholders.”

Market Concerns Mount

The 13 percent PBT decline has sparked concerns among market watchers about the bank’s ability to maintain revenue momentum through the second half of 2025. Financial analysts are particularly focused on whether the current performance trajectory might impact the bank’s full-year projections.

The decline comes against the backdrop of Nigeria’s challenging operating environment, characterized by elevated inflation, foreign exchange volatility, and rising interest rates that have created both opportunities and headwinds for the banking sector.

Recapitalization Progress

A key positive for investors remains the bank’s commitment to meeting regulatory capital requirements ahead of schedule. The institution’s focus on completing FirstBank’s recapitalization well before the March 2026 CBN deadline demonstrates proactive regulatory compliance.

The bank’s emphasis on resolving forbearance loans by the end of 2025 also signals efforts to clean up its balance sheet and improve asset quality metrics, which could position it favorably for future growth.

Digital Transformation Drive

Management highlighted digital transformation as a core strategic pillar, reflecting the banking sector’s broader shift toward technology-driven service delivery. This focus on enhancing customer experience through digital channels is seen as critical for maintaining competitiveness in Nigeria’s evolving financial services landscape.

The bank’s commitment to operational excellence and risk governance suggests management awareness of the need to balance growth ambitions with prudent risk management in the current challenging environment.

With concerns mounting over end-of-year revenue performance, investors and analysts will be closely watching First HoldCo’s third-quarter results to gauge whether the H1 2025 decline represents a temporary setback or signals deeper operational challenges.

The bank’s ability to execute its stated strategic priorities while navigating current market headwinds will be crucial for restoring investor confidence and achieving its full-year targets.

Market observers expect the bank to provide more detailed guidance on revenue expectations and strategic initiatives in upcoming investor communications as stakeholders seek clarity on the path forward.