1 week Ago By Sam Diala, THEWILL
April 28, (THEWILL) – FirstHoldCo’s 2024 results show a significant boost in earnings and profit, but also highlight some areas of concern, one of which is the increase in the Non-Performing Loans (NPLs) ratio. FirstHolCo recorded a 10.20 percent hike in NPLs ratio in FY 2024 from 4.
70 percent in FY 2023 according to its current audited financial statements. Although the overall NPLs status is within the 5 percent regulatory benchmark prescribed by the Central Bank of Nigeria (CBN), the FY 2024 position raises concerns about probable threat to asset quality. The Group disclosed that the high NPL came from a single borrower in the oil and gas sector, which compounds the concern given the uncertainty that confronts the sector in 2025.
Additionally, the Group has endeavoured to avoid a return to the ugly years it was trapped in the miry clay of intractable non-performing facilities, which grossly undermined its balance sheet growth for a while, a significant increase of 5.80 percentage points in NPL in FY 2024 cannot be seen as encouraging. The high-interest rate environment, while positive for interest income, increased impairment charges on loans.
This adversely affected the lender’s loan book, doubling impairment charges to N426.29 billion in FY 2024 from N224.95 billion in FY 2023.
This impacted on the level of profit and shareholders’ fund. It also constitutes a threat to asset quality in the financial services industry that has become fiercely competitive towards the March 31, 2026 recapitalisation deadline. Another implication is the effect on the decline in Cost-to-Income ratio from 95.
19 percent in FY 2023 to 70.82 percent in the review period. This is amid inflationary pressure that drove other operating expenses to N563.
71 billion, fueled mainly by maintenance costs, advert & corporate promotions, and AMCON levy. A further look at the FY 2024 financial statements also revealed that FirstHolCo’s Loan-to-Deposit ratio declined to 60.07 percent from 67.
48 percent in the preceding period, suggesting a drop in its lending portfolio or a decision to operate in the comfortable zone of excess liquidity. Either way, the sharp increase in NPLs ratio, especially hinging on the significant exposure to the volatile oil and gas industry, dilutes the excitement of the notable increase in profitability during the review period. This is capable of evoking a reflection to the heavy-footed performance of 2018 when its NPLs ratio reached the 25.
9 percent peak in the post-2008/2009 global financial crisis era. It is noteworthy that the behemoth institution’s financial position improved with total assets, deposits, and loans increasing by double digits. Loans to customers and loans to banks climbed N8.
77 trillion and N3.30 trillion as customer deposits and deposits from banks rose to N17.17 trillion and N2.
92 trillion in FY 2024, respectively. On stock performance, FirstHoldCo closed its last trading day (Friday, April 25, 2025) at N25.00 per share according to data from the Nigerian Exchange (NGX).
FirstHoldCo began the year with a share price of N28.05 but has since lost 10.9 percent off that price valuation, ranking it 115th on the NGX in terms of year-to-date performance.
“Shareholders’ worries are compounded by the fact that FirstHoldCo has lost 12 percent of the stock’s value from March 24th to date,” the NGX said in a note, adding that “FirstHoldCo is the 11th most traded stock on the Nigerian Stock Exchange over the past three months (Jan 23 – Apr 25, 2025).” The stock has traded a total volume of 778 million shares—in 19,617 deals—valued at N22.8 billion over the period, with an average of 12.
3 million traded shares per session. A volume high of 99.1 million was achieved on February 5th for the same period.
According to the 2024 financial statements, the group has 35.90 billion shares outstanding. Notably, Femi Otedola increased his total (direct and indirect) shareholdings by 108.
83 percent, from 2.03 billion shares in 2023 to 4.23 billion shares in 2024, bringing his stake to 11.
80 percent of the company’s total shares. The share price experienced high volatility throughout the year, with significant fluctuations between its 52-week high and low. Analysts believe that the cost implication of the Group’s proposed 44-story head office in Eko Atlantic City, Lagos, could become an earnings slow burner.
They also predict a pulse in dividend payment in the coming year to consolidate the funds needed to execute the ultra-modern edifice in Nigeria. In pursuit of the N500 billion recapitalisation exercise, the Group raised N187 billion with 25 percent oversubscription rights issue in March 2025, but the net proceeds utilised is N147 billion. The lender is set to wrap up its capital raise by raising N350 billion through a private placement exercise.
Amidst the capital raise exercise, the Group announced a final dividend payment of N0.60k per share with a dividend yield of 2.44% as of April 17, 2025.
During the investors’ call, the First HolCo disclosed that the low dividend payout in FY 2024 is to enhance the capital position and promised a higher dividend payout upon meeting the regulatory capital target. On a heartening note, the lower exchange rate volatility lessened its FX revaluation loss to N64.95 billion in FY 2024 compared to N334.
23 billion in FY 2023, preserving the net earnings position. Thus, profit before and after Tax grew by triple digits to N796.47 billion and N677.
01 billion in FY 2024, respectively. Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
.
