SAT OCT 24 2026-theGBJournal| FIRSTHOLDCO published its unaudited 9M-26 results on Friday, reporting a 54.5% y/y increase in earnings per share (EPS) to NGN16.45, from NGN10.65 in 9M-25.
Earnings growth was primarily driven by stronger trading gains on investment securities, foreign exchange trading income, and financial advisory fees, which more than offset the weakness in core interest income.
Interest income declined by 8.7% y/y to NGN2.09 trillion (9M-25: NGN2.29 trillion), as lower income from loans and advances to customers (-10.6% y/y) and investment securities (-9.6% y/y) outweighed a 21.5% y/y increase in interest income from loans to banks.
The decline in customer lending income reflected a 1.7% y/y contraction in the loan book, alongside a lower average earning-asset yield of 14.5%, compared with 17.3% in FY-25. The loan book also contracted by 1.3% q/q in Q3-26.
Meanwhile, interest expense increased by 5.2% y/y to NGN833.00 billion, as a 34.2% y/y increase in interest paid on customer deposits more than offset declines in interest on deposits from financial institutions (-56.7% y/y) and borrowings (-11.7% y/y).
Customer deposits grew by 28.1% y/y to NGN22.91 trillion. Despite the increase in interest expense, the cost of funds declined to 4.5%, from 4.9% in FY-25, reflecting slower growth in interest expense relative to interest-bearing liabilities.
Consequently, net interest income declined by 16.0% y/y. Although impairment charges fell by 28.3% y/y to NGN207.10 billion, they increased by 20.0% q/q, contributing to a 13.1% y/y and 20.4% q/q decline in net interest income after loan loss expense. Accordingly, net interest margin narrowed to 8.7% in 9M-26, from 11.3% in FY-25.
Non-interest income remained the primary earnings growth driver, surging by 143.6% y/y to NGN724.80 billion.
This performance was supported by a 123.1% y/y increase in gains on investment securities to NGN165.71 billion, from NGN74.28 billion in 9M-25.
The improvement largely reflected a 430.8% y/y and 186.1% q/q surge in trading gains on debt instruments measured at fair value through profit or loss (FVTPL), which reached NGN136.94 billion.
Foreign exchange trading income also increased by 117.5% y/y to NGN70.49 billion, from NGN32.41 billion in the corresponding period of 2025.
In addition, net fee and commission income grew by 48.1% y/y to NGN316.43 billion, driven largely by a sharp 5,034.3% y/y increase in financial advisory fees.
However, non-interest income declined by 18.7% q/q, partly reflecting a 93.4% q/q contraction in non-operating income due to lower debt recoveries during the period.
Consequently, operating income increased by 17.8% y/y to NGN1.78 trillion but declined by 19.7% q/q, indicating weaker sequential performance despite strong year-on-year growth.
Operating expenses declined by 8.1% y/y to NGN866.60 billion, supported by lower personnel expenses (-2.8% y/y) and deposit insurance premiums (-16.4% y/y).
The combination of stronger operating income and lower operating expenses improved the cost-to-income ratio, excluding loan loss expense (ex-LLE), to 43.7%, from 52.4% in 9M-25, indicating improved operating efficiency.
Overall, profit before tax (PBT) increased by 60.8% y/y to NGN911.24 billion, while profit after tax (PAT) rose by 62.6% y/y to NGN733.61 billion, compared with NGN458.08 billion in 9M-25.
Outlook: First HoldCo’s 9M-26 performance highlights the growing contribution of trading gains, foreign exchange income, and fee-based revenue to earnings.
While these income streams and improved cost efficiency supported robust profit growth, the contraction in interest income, declining net interest margin, and weaker q/q operating income underscore persistent pressure on core banking earnings.
Sustaining profitability will depend on the recovery of core interest income, effective management of funding costs, and the resilience of non-interest revenue streams.
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