The unaudited full-year 2025 results of First HoldCo Plc have sparked intense scrutiny among analysts following the disclosure of a ₦405.9 billion loss in the fourth quarter, which erased most of the group’s earnings for the year and reduced full-year profit to ₦44.98 billion, down 93% from ₦677 billion in 2024.
While the group remained marginally profitable for the year, analysts say the scale, timing, and concentration of losses booked in Q4 raise deeper questions about credit governance, cost control, and the effectiveness of board oversight.
Impairments Dominate the Story
At the centre of concern is the group’s ₦748.1 billion impairment charge for FY 2025, one of the largest ever reported by a Nigerian bank.
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₦459.2 billion, or more than 60%, was recognised in Q4 alone
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The full-year impairment represents over 11% of the group’s ₦6.52 trillion loan book
Analysts say impairments of this magnitude almost always reflect multi-year credit deterioration, rather than a sudden macroeconomic shock.
“Losses of this scale are not generated in a single quarter,” one analyst told Arbiterz. “They usually point to risks that were carried, refinanced, or deferred for years before recognition.”
Among the questions now being asked:
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Who were the largest obligors behind the impairment spike?
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Why were these exposures not recognised earlier?
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What has changed in credit approval, monitoring, and recovery frameworks?
Costs Surge as Earnings Collapse
Beyond credit losses, analysts are equally unsettled by cost behaviour during a year of collapsing profitability.
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Other operating expenses rose to ₦809.4 billion, from ₦563.7 billion in 2024
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Advertising and corporate promotions alone reached ₦185 billion, over 25% of total operating costs
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Maintenance expenses climbed to ₦151 billion
One analyst questioned whether the bank was operating with the mindset of an institution under capital stress.
“The issue isn’t whether these costs can be justified in isolation,” the analyst said. “It’s whether they reflect an organisation behaving as if capital were scarce — or abundant.”
Tax and Treasury Puzzles
Despite sharply lower profits, the group reported an income tax expense of ₦176.3 billion, implying an unusually high effective tax burden relative to net earnings.
Analysts suggest this may reflect disallowable expenses, prior-year adjustments, or deferred tax write-offs, all of which warrant clearer explanation.
Separately, ₦87.1 billion in net losses on financial instruments at fair value through profit or loss (FVTPL) raised questions about treasury positioning and hedging discipline in a volatile interest-rate environment.
Board Oversight and Audit Questions
The heavy concentration of losses in the final quarter has reignited debate about board and audit oversight.
“Credit deterioration of this scale doesn’t suddenly appear,” one analyst noted. “It accumulates through optimistic assumptions, refinancing, collateral revaluations, or delayed recognition. When it finally crystallises, it exposes the gap between accounting comfort and economic reality.”
RC Investment Stake and Disclosure Clarity
Analysts have also focused on the 23.47% stake linked to RC Investment Management Limited, which the company has described as being held by an “independent bridge holder.”
Market participants say investors would benefit from clearer confirmation on whether the acquisition was fully settled with fresh funds, or whether any portion remains recorded as a receivable.
Capital Allocation and the Headquarters Debate
Against an estimated return on equity of roughly 1.4%, analysts have also questioned the optics of plans for a new prestige headquarters at Eko Atlantic.
“A bank delivering sub-inflation returns should prioritise balance-sheet repair, not monument building,” one analyst remarked.
The Otedola Question: Risk or Reset?
The results have inevitably sharpened debate around Femi Otedola, First HoldCo’s chairman and largest individual shareholder.
One analyst, speaking bluntly to Arbiterz, questioned whether Otedola fully grasped the depth of the challenge when he took control.
“Otedola hadn’t the foggiest idea what he was buying into, to tell the truth,” the analyst said. “This is going to be his biggest challenge yet. This is not trading diesel.”
Others, however, see opportunity amid the wreckage — precisely because the losses have now been laid bare.
“The positive is that there is now full disclosure,” another analyst noted. “What happens next depends on whether Otedola can hire the right experts and give them a genuinely free hand to change the culture of the place completely.”
That analyst added that ambition should not be modest.
“There is no reason why First HoldCo should not aim for the governance and compliance standards of a Standard Chartered or Stanbic IBTC. If that happens, the upside for him as the major investor is enormous.”
A Defining Moment
Some investors view the scale of the losses as evidence that the worst may finally have been recognised. Others remain cautious, arguing that trust has been damaged and that further disclosures may yet emerge.
What is no longer in dispute, analysts say, is that FY 2025 marks a defining moment for First HoldCo’s board, management, and regulators — one that will test whether accountability follows disclosure, and whether governance reform can match the scale of the losses now laid bare.
For shareholders, the choice is increasingly stark: commit to a multi-year recovery anchored on reform and discipline, or accept prolonged uncertainty as the cost of staying invested.
