FirstHoldco, the parent company of First Bank, is undergoing a significant capital rebound by addressing legacy non-performing loans and strengthening its balance sheet. Analysts often urge banks to lend more to the real sector, but the economic environment, including inflation and disposable income levels, determines loan repayment capacity. In 2019, the Central Bank of Nigeria (CBN) mandated a 65% loan-to-deposit ratio, later reduced to 50%, to encourage lending. Some banks resisted, opting for selective lending to maintain clean books, while others faced delinquent debtors.
Legacy Loan Challenges
The Asset Management Corporation of Nigeria (AMCON) still manages over N4 trillion in bad loans, even past its sunset date. Nigeria’s tier-one banks, including First Bank, reported huge impairment charges in 2025. First Bank’s Q1 2026 results show a proactive approach: net interest income rose over 20% to N439 billion, signaling a move away from weak loan recovery. The bank fully provided for legacy non-performing exposures and wrote them down, while pursuing recovery through legal and commercial channels.
Impact on Stakeholders
Weak loan recovery affects depositors, borrowers, shareholders, and regulators. Depositors worry about fund safety, borrowers face higher rates and stricter collateral, shareholders see reduced profitability, and regulators must intervene. First Bank’s transparency in addressing bad loans, including a no-dividend decision, demonstrates accountability and credibility. The N745 billion impairment charges in 2025, though high, reflect a willingness to face challenges head-on.
Q1 2026 Performance
Impairment charges dropped significantly to N40 billion in Q1 2026. Non-interest income from electronic banking and credit-related charges grew over 100%. The bank earned N46.57 billion from selling investment securities, compared to N136 million in Q1 2025. The stock market responded positively, with FirstHoldco shares rising 32% in April, making it the best-performing tier-one bank stock on the Nigerian Exchange. Additional share purchases by Chairman Femi Otedola further boosted confidence.
Capital Raising and Subsidiaries
FirstHoldco plans to raise N253.099 billion in fresh capital to reach a N1 trillion capital base, exceeding the CBN’s N500 billion requirement for an international license. A larger capital base enhances lending power, secures foreign credit lines, and supports cross-border trade. African subsidiaries now contribute a fifth of group revenue, providing a buffer against Nigeria’s tough business environment. Innovation aligned with CBN regulations can help these units adapt products to local markets and drive growth.
As the economy stabilizes, credit deployment will expand economic activity. Other entities should follow First Bank’s lead in acknowledging bad loans and strengthening recovery processes to collectively grow the sector.
