Billionaire Femi Otedola's First HoldCo is targeting a N1 trillion capital base as it moves to reshape Nigerian banking

Femi Otedola's FirstHoldCo is not stopping at N500 billion. The company that controls Nigeria's oldest commercial bank has told shareholders it wants to raise another N253 billion in fresh capital, with the target a N1 trillion paid-up base that would put it in a category of its own among Nigerian lenders and, Otedola argues, where it needs to be.

The proposal landed in a notice for the company's 14th Annual General Meeting, scheduled for May 29, 2026. Shareholders will be asked to approve a special resolution authorising the raise, which the board described as executable through any combination of public offerings, private placements, rights issues, bonus issues, scrip dividends or other equity instruments in either Nigerian or international capital markets. The pricing would be set through book building or another valuation method the board determines at the time.

The mechanics leave the board significant flexibility, but the destination is precise. FirstHoldCo already crossed the Central Bank of Nigeria's current N500 billion minimum threshold for international authorisation, the higher of the two capital tiers the regulator introduced in its 2024 recapitalisation directive. Getting to N1 trillion doubles that floor. And that, Otedola has made clear, is the whole point.

He has been vocal about his belief that the N500 billion threshold is not enough. In his framing, Nigeria cannot credibly aim to build a $1 trillion GDP while its most important financial institutions remain, as he has put it, "weakly capitalised." He has called publicly on the CBN to raise the minimum requirement for international banking licences to at least N1 trillion, and FirstHoldCo is not waiting for that instruction before moving. The group is building the argument through action rather than advocacy.

The capital push sits on top of a financial turnaround that has been faster and steeper than most analysts expected. FirstHoldCo reported a 72% year-on-year surge in profit before tax to N321.1 billion in the first quarter of 2026, placing it second in the FUGAZ group, the shorthand for Nigeria's five largest banking conglomerates, behind only Zenith Bank's N360.9 billion. More telling than the profit ranking was the return on equity. FirstHoldCo posted an annualised ROE of 31.6% in the quarter, the highest in the cohort, ahead of Zenith at 24.9% and GTCO at 24.8%. That number matters because the bank is still mid-recapitalisation. Producing a best-in-class ROE while diluting equity to meet a regulatory minimum is not something the market had priced in.

The underlying driver of the ROE is an aggressive loan recovery programme. Under CEO Olusegun Alebiosu, a former Chief Risk Officer who was appointed specifically for this phase of the bank's rebuild, loan recoveries reached N19 billion in the first quarter, a jump of 1,570% from N1 billion in the same period of 2025. The bank wrote off N826 billion in legacy bad loans in late 2025, a decision that wiped out that year's profit line but scrubbed decades of accumulated bad debt from the balance sheet in a single move. The Q1 2026 numbers are the first clean report after that surgery, and they suggest the operation worked.

The group reached this position through a multi-pronged capital strategy. A rights issue earlier in the recapitalisation cycle was followed by a N45 billion private placement completed in March 2026. The group also divested its merchant banking subsidiary FBNQuest, removing a capital-intensive non-core business from the structure and freeing up resources the bank could redirect into its core lending business. The N253 billion now proposed is intended to close the remaining gap to the N1 trillion target.

Wale Oyedeji serves as Group Managing Director of FirstHoldCo, with Alebiosu running the First Bank subsidiary. The two-layer structure, with a holding company above the bank, gives the group flexibility to raise capital at the holding company level and deploy it across subsidiaries as needed. That structure also makes international capital market access more straightforward, and the AGM notice explicitly flags both Nigerian and international markets as potential venues.

The competitive context gives the raise additional weight. If FirstHoldCo reaches N1 trillion in paid-up capital and Otedola's advocacy persuades the CBN to raise the mandatory minimum, the FUGAZ peers will face a new race to the top. Access Holdings, GTCO, Zenith and UBA are all managing their own recapitalisation timelines. A FirstHoldCo that arrives at N1 trillion first resets what the market expects from a tier-1 Nigerian bank, and not just on paper. The N1 trillion target is a commercial argument as much as a regulatory one: a bigger balance sheet means bigger deal tickets, more syndicated lending capacity and a stronger hand in the competition for multinational and sovereign clients.

The AGM on May 29 is the next formal step. Shareholders have shown appetite throughout this recapitalisation cycle, and the Q1 results give them a concrete justification to say yes.