First HoldCo’s recoveries surge 1,503% to N94.31 billion

First HoldCo Plc’s recoveries surged by 1,502.8% to N94.31 billion in the nine months ended September 30, 2026, from N5.88 billion in the corresponding period of 2025, even as the amount recorded in the third quarter fell sharply to N2.42 billion.

An analysis by Nairametrics Research of First HoldCo’s unaudited financial statements shows that recoveries were heavily concentrated in the first half of the year, with N91.89 billion recorded between January and June.

Third-quarter recoveries accounted for just 2.6% of the nine-month total. The increase came as the Group’s profit before tax rose by 60.84% to N911.24 billion from N566.54 billion a year earlier.

How recoveries contributed to profit growth

The N94.31 billion in recoveries was recognized under other operating income, which increased to N142.06 billion from N23.83 billion in the corresponding period of 2025.

• Recoveries accounted for approximately 66.4% of other operating income during the period, compared with 24.7% in 9M 2025, highlighting their growing contribution to the Group’s non-interest earnings.
• The increase in recoveries coincided with an improvement in profitability. Profit after tax rose by 65.11% to N744.45 billion from N450.87 billion, while profit before tax increased by 60.84% to N911.24 billion from N566.54 billion.
• The increase in recoveries provided a significant boost to earnings. However, Nairametrics Research calculations show that even after excluding recoveries from both periods, First HoldCo’s pre-tax profit would still have grown by approximately 45.7%, from N560.65 billion to N816.93 billion.
• This indicates that while recoveries supported the Group’s earnings growth, other income sources and changes in expenses also contributed substantially to the improvement in profitability.

The financial statements classify the amounts as recoveries but do not identify the borrowers, loan portfolios or specific exposures responsible.

Otedola explains push to recover bad loans

The increase in recoveries comes amid First HoldCo’s efforts to address historical credit exposures and strengthen its lending practices.

• In an exclusive interview with Nairametrics published on August 3, 2026, Group Chairman Femi Otedola disclosed that the institution had impaired more than N3 trillion in loans over the preceding decade, highlighting the extent of its historical credit-quality challenges.

Otedola attributed the deterioration in the loan book to weaknesses in credit governance and persistent borrower defaults.

• He explained that First HoldCo had strengthened credit governance, tightened risk-management procedures and intensified recovery efforts to address delinquent obligations.

The chairman also identified increased recoveries from defaulting borrowers as evidence of progress in the Group’s restructuring programme.

His comments provide context for the institution’s broader recovery strategy following the substantial impairment charges recorded in previous periods.

Lower impairment charges support earnings growth

First HoldCo’s impairment charges declined by 28.3% to N207.10 billion in 9M 2026 from N288.92 billion in the corresponding period of 2025, even as customer lending increased.

• The N81.82 billion reduction in impairment charges helped ease pressure on earnings, particularly as the Group’s net interest income declined to N1.26 trillion from N1.50 trillion a year earlier.
• Loans and advances to customers rose by 4.8% to N9.39 trillion as of September 30, 2026, from N8.97 trillion at the end of December 2025. Despite the expansion in the loan portfolio, the Group recorded lower impairment charges during the period.
• Third-quarter profit after tax also rose by 35.5% to N218.32 billion from N161.10 billion a year earlier, even though recoveries were substantially lower than the amount recorded in the first half.
• This indicates that First HoldCo continued to grow its quarterly earnings year-on-year, despite a smaller contribution from recoveries in the latest quarter.

For investors, the sharp difference between recoveries recorded in the first half and third quarter highlights the importance of First HoldCo sustaining earnings growth through its core banking operations and lower impairment charges, rather than relying heavily on recovery-related income that may not recur consistently.