In Audited, CBN-released Account, First HoldCo Posts Industry’s Highest Impairment at N826bn, 78% Profit Slump

First HoldCo Plc has finally submitted its audited financial statements for the year ended December 31, 2025, to the Nigerian Exchange Limited (NGX), revealing a troubling surge in impairment charges. As a leading financial institution, the company's performance is closely watched, and these results paint a concerning picture. The impairment charges have escalated dramatically by 93.8% to N826.3 billion, a stark contrast to the N426.29 billion reported in 2024. This significant increase has directly impacted profitability, with profit after tax plummeting by 78% to N147.25 billion from N663.499 billion in the previous year.

In an apparent effort to mitigate concerns arising from the weak full-year performance, First HoldCo has also released its unaudited first quarter 2026 management accounts. While net impairment charges on financial assets saw a modest increase from N37.25 billion to N40.35 billion in Q1 2025, the overall trend of rising impairments remains a key focus for stakeholders. Despite a healthy growth in interest income and strong non-interest income driven by digital transactions, the ballooning operating expenses and, notably, advertising costs, raise questions about cost efficiency.

An analysis of the figures highlights a substantial 141% increase in advertising and corporate promotions, reaching an estimated N183.4 billion in 2025. This figure surpasses the levy paid to the Asset Management Corporation of Nigeria (AMCON) and the amount spent on Information Technology maintenance. From our perspective at ThisDay, such an aggressive spending on advertising, especially when profitability is declining sharply due to impairments, warrants closer examination. It suggests a potential misallocation of resources or a strategy that is not yielding the expected returns, particularly when compared to industry peers who have managed their advertising budgets more conservatively.

The release of these audited results, albeit delayed, provides much-needed transparency. However, the significant impairments and the disproportionate rise in advertising expenditure necessitate a thorough review by the company's management and the board. Stakeholders will be looking for clear strategies to address these challenges and restore confidence in First HoldCo's financial health and operational efficiency.

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Non-interest income remained strong, with net fees and commission income rising by 20.2 per cent to N294.5 billion, supported by greater digital transaction volumes, transfer and intermediation fees, and letter of credit commissions and fees