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When Femi Otedola became chairman of FirstHoldCo in January 2024, he inherited a balance sheet carrying decades of unresolved bad loans and a market that had largely written the bank off as a laggard. Eighteen months later, his team has produced the highest return on equity in the FUGAZ group and the second-largest profit before tax in Nigeria's tier-one banking sector, and done it in a single quarter.
The group reported a profit before tax of N321 billion ($233.5 million) for the first quarter of 2026, a 72% jump from N186.47 billion in the same period last year. The result places it 2nd in Nigeria's banking profit league, behind only Zenith Bank's N360.91 billion and ahead of GTCO at N302.89 billion, Access Holdings at N272.2 billion and UBA at N160.65 billion.
That is not a league table position FirstHoldCo has occupied before. The fact that it is there now tells you everything about what the N830 billion impairment charge taken in 2025 was actually for.
The write-off that set everything up
The context is important. In 2025, FirstHoldCo's management, led by billionaire businessman Femi Otedola, took the single most aggressive balance sheet action in the bank's recent history, absorbing N830 billion in impairment charges to resolve legacy non-performing loans once and for all. The decision destroyed the 2025 profit line and made for uncomfortable reading in annual reports. It also cleared the path for exactly the kind of Q1 2026 performance the bank has just delivered.
The strategy in banking circles is sometimes called "kitchen-sinking": take every conceivable loss in a single period, get it done, and let the clean balance sheet do its work in the quarters that follow. Done properly, it produces a sharp earnings recovery as the provisioning drag disappears and the loan book gets redeployed toward higher-yield credit. Done at the scale FirstHoldCo executed it, it produces a 72% profit jump in the very next comparable period.
The CBN's 26.5% Monetary Policy Rate has helped Nigerian banks broadly, by raising the returns on lending. But that tailwind is available to every lender in the FUGAZ group. What distinguishes FirstHoldCo's Q1 result is the structural work done underneath the surface.
Return on equity that no one else is matching
The most striking number in the results is not the profit figure. It is the return on equity. FirstHoldCo delivered a post-tax ROE of 31.6% in Q1 2026. That surpasses every other bank in the FUGAZ group. It also represents a turnaround from the 4.6% ROE recorded at end-2025, when the balance sheet reset was at its deepest.
ROE is the number that tells you whether a bank is generating real returns from the capital its shareholders have put in. A 31.6% ROE says that FirstHoldCo is currently generating more value per naira of equity than its peers, in a quarter when those peers were also posting strong numbers. The fact that this is happening while the bank is simultaneously completing its recapitalisation, a process that by definition dilutes ROE by bringing in fresh equity before it can be fully deployed, makes the metric more impressive still.
Where the revenue is coming from
The earnings improvement is not coming from government securities. FirstHoldCo has deliberately pivoted toward private sector credit, and the Q1 numbers reflect that shift. Interest income from loans and advances to customers reached N466 billion in the quarter, up 28% from the prior year. That growth rate is higher than the equivalent figures from its closest peers and suggests the bank is winning lending mandates in a market where not everyone is comfortable extending credit.
Cost discipline has also moved in the right direction. The cost-to-income ratio improved from 53.8% at end-2025 to 45.2% in Q1 2026. That still leaves the bank behind GTCO, the perennial efficiency benchmark at 30.9%, and slightly behind Zenith at 43.5%. But it is substantially better than Access Holdings at 55.8% and UBA at 61.2%. And the trajectory matters as much as the absolute level: with total operating expenses rising 21% year-on-year to N298 billion while net earnings grew 41%, the bank is running positive operating leverage, meaning its income is growing faster than its cost base.
The recovery line that nobody expected
Perhaps the most arresting data point in the quarterly filing is buried in the non-interest income section. Loan recoveries, the cash the bank is clawing back from assets it wrote off in the 2025 cleanup, came in at N19 billion in Q1 2026. In Q1 2025, the same line read N1 billion. That is a 1,570% increase.
The write-offs that hurt the 2025 results are now generating real cash returns as the bank's recovery teams work through the written-off portfolio. That income flows straight to the bottom line with no associated cost, which is one of the quieter reasons why the Q1 PBT number looks as good as it does.
Total assets stood at N26.8 trillion at the end of March 2026, slightly down from December 2025 as management continued to optimise the balance sheet rather than simply grow it for its own sake.
Femi Otedola, who holds approximately 18.12% of FirstHoldCo and became chairman in January 2024, arrived at a bank where the problems were structural and the solutions were painful. The Q1 results suggest the solutions are working.
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