First Holdco Plc (formerly FBN Holdings) has reported an 18% year-on-year decline in net profit for the first quarter of 2025, primarily due to underperformance in non-interest income.
The financial services company’s results reveal a challenging start to the year, with key metrics showing significant declines compared to the same period last year, raising questions about the group’s competitive position in the financial services sector.
According to the company’s unaudited financial statement, First Holdco’s gross earnings increased marginally by 3.3% year-on-year to ₦729.3 billion, up from ₦704.2 billion in Q1 2024.
While net interest income grew impressively by 61% year-on-year to ₦365.2 billion from ₦226.8 billion in Q1 2024, non-interest income decreased substantially by 60% to ₦104 billion from ₦260 billion in the comparable period.
Operating expenses rose by 16.4% year-on-year to ₦245.3 billion, compared to ₦210.8 billion in Q1 2024, further constraining profitability despite lower impairment charges. Consequently, profit after tax declined by 17.9% to ₦167.4 billion from ₦208.3 billion in Q1 2024.
CardinalStone Securities Limited noted in its review: “The performance was primarily weighed down by a sharp contraction in non-interest revenue, which offset the strong growth recorded in net interest income, limiting the expansion of gross earnings.”
On a positive note, the cost of risk improved to 1.7%, supported by a 1.31% year-on-year decline in impairment charges on loans and advances, despite an 11.1% increase in gross loans to ₦9.7 trillion.
However, the cost-to-income ratio increased to 52.3%, reflecting higher personnel costs, regulatory levies (AMCON and deposit insurance), and increased spending on advertising and promotions.
The weakened earnings performance resulted in an annualized return on average equity (ROAE) of 24.2%, down significantly from 44.5% in Q1 2024. Similarly, First Holdco’s return on average assets (ROAA) decreased to 2.5% from 4.2% a year earlier.
