KEY POINTS

• FirstHoldCo’s Q1 2026 profit before tax jumped 72 percent to N321 billion ($233.5 million), the second-highest in Nigeria’s tier-one banks.
• Femi Otedola’s 2025 decision to absorb N830 billion in impairment charges cleared decades of bad loans and unlocked the recovery.
• The bank delivered a 31.6 percent post-tax return on equity, the highest in the FUGAZ group.

Eighteen months after Femi Otedola took the chairman’s seat at FirstHoldCo Plc, his decision to swallow N830 billion in impairment charges in 2025 has produced its first clean read: a 72 percent jump in first-quarter profit that lifts the bank above GTCO, Access Holdings and UBA in Nigeria’s banking profit league.

FirstHoldCo posted profit before tax of N321 billion, equivalent to about $233.5 million, for the first quarter of 2026, up from N186.47 billion in the same period last year. The result places the parent of First Bank of Nigeria second only to Zenith Bank’s N360.91 billion in the FUGAZ group, ahead of GTCO at N302.89 billion, Access Holdings at N272.2 billion and UBA at N160.65 billion.

Now the league-table position is itself the news. FirstHoldCo, long viewed as the laggard of Nigeria’s tier-one banks, has not occupied that slot in recent memory.

The kitchen-sink that worked

Specifically, the Q1 result is the direct consequence of the most aggressive balance sheet action in the bank’s recent history. In 2025, Otedola pushed management to absorb N830 billion in impairment charges to clear decades of legacy non-performing loans in one painful sweep.

Indeed, the move is what bank analysts call kitchen-sinking: take every conceivable loss in a single period, get it done, and let the clean balance sheet drive the recovery in following quarters. Done at FirstHoldCo’s scale, the result is now visible.

Moreover, the Central Bank of Nigeria’s 26.5 percent Monetary Policy Rate has lifted lending margins across the FUGAZ group, but Otedola’s cleanup gave FirstHoldCo a structural lift no peer could replicate.

ROE the others cannot match

The standout figure was not the headline profit. FirstHoldCo’s post-tax return on equity hit 31.6 percent in Q1, the highest in the FUGAZ group, and a sharp turnaround from the 4.6 percent recorded at end-2025 when the cleanup was at its deepest.

Today, that ROE matters because FirstHoldCo is simultaneously completing its recapitalization, a process that typically dilutes returns by raising fresh capital before it can be deployed. Posting 31.6 percent ROE during recapitalization puts FirstHoldCo in a category by itself.

Furthermore, the earnings improvement reflects a deliberate pivot toward private sector credit rather than government securities. Interest income from loans and advances to customers reached N466 billion in the quarter, up 28 percent year-on-year, a faster growth rate than peer banks.

Additionally, cost discipline strengthened. The cost-to-income ratio improved to 45.2 percent from 53.8 percent at end-2025, narrowing the gap with Zenith at 43.5 percent and Access at 55.8 percent, although still trailing GTCO at 30.9 percent.

Meanwhile, total operating expenses rose 21 percent year-on-year to N298 billion, but net earnings climbed 41 percent. The bank, in other words, is producing positive operating leverage.

Recoveries blow past expectations

The most striking line item sits in non-interest income. Loan recoveries, the cash FirstHoldCo is clawing back from assets it wrote off in the 2025 cleanup, jumped 1,570 percent to N19 billion from N1 billion a year earlier.

According to Billionaires Africa, that income flows straight to the bottom line with no associated cost, one of the quieter reasons behind the Q1 profit surge. Total assets stood at N26.8 trillion at end-March 2026, slightly below December 2025 as Otedola’s team prioritized balance-sheet quality over headline growth.

Otedola, who holds approximately 18.12 percent of FirstHoldCo, took the chair in January 2024 inheriting a bank with structural problems and painful solutions. Yet for now, the Q1 results suggest the solutions are working, and the market still has room to reprice the stock.