First HoldCo profit jumps 82% on trading gains, lower impairments

First HoldCo Plc posted an 81.6 percent increase in first-half profit after tax, reaching N526.13 billion, driven by a sharp decline in credit losses and a surge in trading income. The Nigerian financial services group reported profit before tax of N653.54 billion, up 83.5 percent from the same period in 2025. Shares responded by climbing 10 percent to N105.50.

The earnings beat highlights a successful transition away from volatile foreign exchange revaluation gains toward more sustainable revenue streams. Net interest income actually contracted by 2.84 percent to N879.13 billion as interest margins compressed in Nigeria's high-rate environment. However, non-interest revenue filled the gap, with net fee and commission income rising 28.7 percent to N178.51 billion.

A dramatic swing in the lender's trading book provided the main thrust. Net gains from financial instruments measured at fair value reversed a N53.67 billion loss from the prior year, posting a N65.79 billion gain. Net gains on the sale of investment securities surged more than eightfold to N60.62 billion. This shift is reflected on the balance sheet, where investment securities jumped to N9.23 trillion from N6.97 trillion at the start of the year.

Credit quality improved markedly, with impairment charges falling 37.4 percent to N116.14 billion. This lifted net interest income after impairment to N762.99 billion. Meanwhile, foreign exchange gains moderated significantly to N44.15 billion, down from N73.54 billion, a sign that the group is relying less on currency volatility following greater naira stability.

Cost management remains a challenge as the bank scales. Total operating expenses climbed, with other operating expenses rising 11 percent to N384.55 billion and personnel costs reaching N180.26 billion. Still, the broader balance sheet expanded 12.5 percent to N30.65 trillion, supported by a 16 percent surge in customer deposits to N21.93 trillion despite intense competition for funding.

Net cash from operating activities swung to a positive N502.01 billion, reversing a N1.01 trillion outflow a year earlier. Group Managing Director Wale Oyedeji attributed the performance to deliberate efforts to strengthen the balance sheet. “We are particularly encouraged by the restoration of FirstBank’s capital adequacy ratio ahead of plan, the continued growth of our transaction-led businesses, and the increasing contribution of our Investment Banking and Asset Management franchise," Oyedeji said.

The stock's 10 percent single-day jump extends a remarkable run, with shares having returned 111 percent over the past six months and 210.75 percent over the past year. The results suggest the market's premium valuation is backed by a genuine improvement in underlying fundamentals rather than macroeconomic arbitrage.