Shares of First HoldCo Plc rebounded sharply on Tuesday, climbing nearly 10% to close at N45.15 per share on the Nigerian Exchange (NGX), just a day after the stock was battered by a post-earnings selloff.
The stock took a beating on Monday, shedding -8.78% to close at N41.50 (N3.95 loss) as investors weighed the impact of the company’s interim 2025 FY result.
The unaudited 2025 financials showed a steep drop in profit due to a large impairment charge, according to its filings.
While the rebound reflects bargain-hunting and renewed confidence from some investors, analysts warn that the sustainability of the price recovery remains uncertain and hinges on future earnings performance.
The lender’s shares gained N4.10 or 9.99% to trade around N45.15 per share at midday, with trading data showing more than 22 million units on full bid. This signalled strong demand despite concerns over the bank’s earnings outlook following its latest financial disclosure.
What they are saying
Market analysts say the rebound reflects a reassessment of First HoldCo’s decline in profit in 2025 as a strategic balance sheet reset rather than a lasting structural problem.
They argue that the sharp selloff on Monday may have pushed the stock into undervalued territory, triggering renewed demand from investors with a longer-term view.
- “Following the significant front-loading of impairment charges in Q4 2025 and the Group’s exit from regulatory forbearance, we expect credit costs to normalise gradually, translating into improved earnings quality and real value creation from a cleaner balance sheet,” Meristem Research said in a note.
- “Looking at the trading board, what we are seeing is a vote of confidence in the future of the bank,” said Mr. David Adonri, Chief Executive Officer of Highcap Securities Limited.
- “The bulk of the demand is likely coming from existing shareholders who understand where the bank is coming from, where it is now, and where it is going,” Adonri added.
Analysts note that while sentiment has improved in the very short term, the rebound is still largely sentiment-driven rather than anchored on a recovery in reported earnings.
More insights
The rally comes on the back of a steep decline recorded on Monday, when the stock closed at N41.05 per share, down 8.8% from its January 30 close of N45.00.
That selloff was triggered by the lender’s disclosure of a sharp drop in profit, which initially spooked investors and led to heavy sell pressure.
First HoldCo reported a one-off impairment charge of N748.13 billion in its 2025 unaudited results, a move widely seen as an aggressive clean-up of legacy non-performing loans.
Some market participants believe the impairment has effectively “cleared the decks,” positioning the group for more stable earnings in 2026.
Meristem Research placed a target price of N73.22 on the stock, implying an upside potential of about 62.7% from around N45 per share.
According to traders, the sharp correction created what many viewed as a rare entry point, encouraging bargain-hunting and stock mop-up by investors willing to look beyond near-term earnings weakness.
Expert views
Despite Tuesday’s strong rebound, some analysts remain cautious about how long the rally can last.
They warn that the price surge could moderate once the current wave of buying interest begins to fade.
- “The activities we have seen in the stock today are orchestrated by the injection of funds, and there is a limit to which funds can be injected,” Adonri said.
- “Sooner or later, their war chest will be blown out and they will not have the arsenal to continue firing,” he added.
- “First HoldCo is a stock for future outlook, not for the short term. There are stocks with better prospects in the short term to bet on,” said Mr. Evan Ashagwu, a retail trader on the NGX.
Market watchers say this divergence in views underscores the tension between long-term investors focused on balance sheet repair and short-term traders seeking immediate earnings and dividend catalysts.
What this means
The rebound suggests that a segment of the market is willing to look past First HoldCo’s weak 2025 numbers and focus on its potential post-cleanup earnings trajectory.
However, the sustainability of the rally will depend on whether the bank can translate its cleaner balance sheet into improved profitability and shareholder returns in subsequent reporting periods.
- Short-term price movements are likely to remain volatile as investors digest the implications of the large impairment charge.
- Longer-term valuation will hinge on normalised credit costs and consistent earnings recovery.
- Dividend expectations may remain muted until earnings visibility improves.
For now, analysts say the stock is likely to trade on sentiment, with sharp swings possible as buyers and sellers reassess the risk-reward balance.
What you should know
First HoldCo Plc released its unaudited full-year financial results for the year ended December 31, 2025, last Friday, showing a sharp decline in earnings amid strategic balance sheet adjustments.
- The Group reported a profit after tax of N44.98 billion, down about 93.36% from N677.005 billion in 2024.
- Pre-tax profit fell to N229.097 billion from N796.461 billion in the previous year.
- Net impairment losses surged to N748.1 billion, reflecting aggressive provisioning for credit losses linked to legacy non-performing loans.
Despite the profit crash, interest income rose and gross earnings expanded, pointing to resilience in the group’s core banking operations.
Analysts say these figures highlight the trade-off First HoldCo has made between short-term profitability and long-term balance sheet strength, a strategy that continues to divide investor opinion.
Even when first bank get huge profit their devidend will not be up to one naira per share