THUR JULY 23 2026-theGBJournal| FirstHoldCo Plc returned to strong earnings growth in the first half of 2026, as a surge in trading income, lower loan impairment charges and tighter cost management more than offset pressure on its core lending business.
The lender’s unaudited H1 results point to a recovery in profitability despite a softer interest rate environment that weighed on net interest income.
Interest income fell 2.7 per cent year-on-year to N1.40 trillion, reflecting pressure on asset yields even though the Central Bank of Nigeria reduced the Monetary Policy Rate by just 50 basis points to 26.50 per cent during the period.
While interest expense declined 2.6 per cent to N518.92 billion, the reduction was not enough to offset weaker interest earnings, leaving net interest income down 2.8 per cent year-on-year at N879.13 billion.
However, these pressures were more than offset by a strong expansion in non-interest income as fees and commissions increased by 28.7% to N178.51 billion, trading revenue surged by 524.2% to N170.57 billion, while other income rose by 533.9% to N148.01 billion.
Consequently, pre-provision operating profit grew by 41.9% y/y to N768.11 billion.
The Group also benefited from a significant moderation in credit costs as loan impairment provisions declined by 37.4% y/y to N116.14 billion, resulting in the Cost of Risk improving to 2.4% from 4.0% in H1 2025.
Although total operating expenses increased by 10.0% y/y to N608.09 billion, revenue growth significantly outpaced cost expansion, leading to the Cost-to-Income Ratio improving to 44.1% from 50.5%.
As a result, pre-tax profit advanced by 83.5% y/y to N653.54 billion, while net profit attributable to shareholders increased by 86.4% to N522.79 billion.
The strong earnings performance translated into a substantial improvement in profitability metrics, with Return on Average Equity (ROAE) rising to 30.7% from 19.8%, while Return on Average Assets (ROAA) improved to 3.6% from 2.1%.
Earnings per Share (EPS) consequently increased from N6.31 to N11.76.
Q2 2026 performance was mixed. Net interest income remained broadly flat, increasing marginally by 0.4% q/q to N440.37 billion as a 4.7% decline in interest expense offset a 1.5% reduction in interest income.
Fees and commissions grew strongly by 26.2% q/q to N99.60bn, while other income expanded by 135.9% q/q to N103.95 billion. However, trading revenue declined by 22.8% q/q to N74.31 billion.
Despite a 4.3% increase in operating expenses, pre-provision operating profit rose by 13.1% q/q to N407.73 billion.
Nonetheless, higher impairment charges of N75.79 billion (+87.8% q/q) weighed on earnings growth, resulting in pre-tax profit increasing by a modest 3.5% q/q to N332.42 billion.
After accounting for tax and minority interests, net profit declined by 4.0% q/q to N256.06 billion.
On the balance sheet side, the Group maintained strong growth momentum, with total assets expanding by 12.5% YTD to N30.65 trillion.
This growth was driven primarily by a 13.8% increase in securities holdings to N9.23 trillion and a 6.1% expansion in net loans to N9.51 trillion.
Funding remained robust as customer deposits rose by 16.2% YTD to N21.93 trillion, while shareholders’ equity increased by 7.9% to N3.56 trillion.
However, asset quality metrics weakened slightly, with the NPL ratio rising to 13.9% from 12.9%, suggesting that despite the improvement in impairment charges and profitability, credit risk remains an area investors will continue to monitor closely through the rest of the year.
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