First Bank Holdings Plc (FBNHoldings), Nigeria’s oldest and one of its most systemically important banking institutions, has reported a 15.5 percent decline in profit after tax (PAT) for the third quarter of 2025, reflecting the growing impact of rising loan losses, weaker revenues, and persistent macroeconomic headwinds on the banking sector.
The financial group, chaired by billionaire investor Femi Otedola, posted a PAT of ₦123.9 billion for the nine-month period ended September 2025, down from ₦146.7 billion in the corresponding period of 2024. According to the financial statements filed with the Nigerian Exchange Limited (NGX), the decline was largely driven by higher loan impairment charges and a modest drop in gross earnings.
Loan Impairments and Slower Growth
The report showed that loan loss provisions surged by 42 percent year-on-year, indicating deteriorating credit quality as several business clients struggled to meet repayment obligations amid inflation, foreign exchange volatility, and rising interest rates.
Gross earnings slipped to ₦874.5 billion from ₦902.3 billion a year earlier, representing a 3 percent decline. The drop was attributed to reduced trading income, lower interest margins, and tighter liquidity in the financial system.
Despite the challenging environment, the group maintained operational stability, with digital and electronic banking platforms contributing over 30 percent of total transactions — a reflection of FBNHoldings’ growing strength in digital financial services.
Analysts React to Performance
Reacting to the development, Dr. Celestine Ukpong, an economist and financial analyst, said the results underscore the broader pressure facing Nigerian banks amid a high-interest-rate regime and sluggish economic growth.
“The rising loan losses are a symptom of the fragile business environment where firms are struggling with inflation and currency volatility,” Ukpong explained. “While FirstBank’s fundamentals remain strong, the management must focus on improving risk pricing, diversifying its loan book, and deepening non-interest income streams.”
Ukpong added that the performance should not be viewed as a setback but rather as a signal for strategic recalibration under Otedola’s leadership.
Also commenting, Mr. Peter Adebayo, a chartered accountant and financial governance expert, commended the bank’s transparency and continued investment in digital transformation but advised stronger controls on cost and risk exposure.
“FBNHoldings has shown resilience despite macroeconomic challenges, but the cost-to-income ratio rising to 69 percent is concerning,” Adebayo noted. “Technology and human capital investments are essential, yet management must ensure that these costs translate into measurable efficiency gains.”
He emphasized that the Otedola-led board has demonstrated strong governance principles and strategic foresight but must now accelerate measures to restore profitability through cost optimization and better asset quality management.
Otedola’s Leadership and Strategic Focus
Since his appointment as chairman in 2023, Femi Otedola has driven reforms centered on corporate governance, digital innovation, and capital optimization. His leadership has also prioritized expanding the bank’s retail lending and SME financing portfolios — critical growth areas for the institution’s long-term sustainability.
Industry experts believe that Otedola’s strategic approach, coupled with prudent financial management, could stabilize profitability in 2026 once monetary pressures ease and credit markets normalize.
Outlook
Analysts predict that the bank’s profitability could rebound in the next fiscal year, especially as Nigeria’s financial sector adjusts to exchange rate reforms and improved macroeconomic stability. However, they caution that sustained inflation, high operating costs, and regulatory constraints could continue to pressure margins in the short term.
With a strong capital base, diversified subsidiaries, and an expanding digital footprint, FBNHoldings remains one of Nigeria’s most resilient and forward-looking financial institutions.
As stakeholders await the group’s full-year results, industry watchers agree that Otedola’s steady hand and renewed risk discipline will be vital in steering the financial giant through the current economic turbulence toward sustained growth.
FirstBank Holdings’ profit drops 15.5% under Femi Otedola’s leadership as loan losses rise and revenues weaken. Economists Celestine Ukpong and Peter Adebayo urge tighter risk controls, cost efficiency, and diversification to restore profitability.
Discover more from Ameh News
Subscribe to get the latest posts sent to your email.
