FirstHoldCo to pay 60% of annual profit as dividends

First HoldCo Plc has moved to boost investor confidence by adopting one of the most generous dividend policies among Nigeria’s tier-one lenders, committing to distribute at least 60 percent of its annual profit after tax to shareholders in a bold signal that the group’s two-year restructuring under Chairman Femi Otedola is beginning to yield results.

The policy, approved by the board on July 28 and announced Thursday, comes after Otedola deepened his control of the financial services group through the acquisition of an additional 1.779 billion shares worth N222.2 billion, further strengthening his influence over Nigeria’s oldest banking institution.

The new dividend commitment marks a significant shift in FirstHoldCo’s capital allocation strategy. It is likely to position the group among the most attractive income stocks on the Nigerian Exchange if this trend is sustained.

The board said the policy reflects confidence in the group’s stronger earnings capacity, improved capital position, healthier asset quality, diversified revenue base, and outlook for sustained profitability, although distributions will remain subject to regulatory approvals.

The announcement reinforces growing market expectations that the extensive governance and capital reforms initiated since Otedola assumed the chairmanship are translating into measurable shareholder returns.

“This resolution demonstrates the Board’s confidence in the strength of our franchise, the sustainability of our earnings, and our commitment to delivering tangible value to shareholders,” Otedola said.

He said the group had spent the last two years rebuilding governance, cleaning up its balance sheet, restoring confidence, strengthening capital, and repositioning the institution for long-term growth.

“We are now beginning to see the benefits of those strategic decisions,” he added.

The enhanced dividend policy follows one of the strongest half-year performances in the group’s recent history.

FirstHoldCo reported gross earnings of N1.93 trillion for the six months ended June 30, 2026, representing a 16.7 percent increase from a year earlier, while operating income rose 25.8 percent to N1.38 trillion.

Profit before tax surged 83.5 percent to N653.5 billion, while profit after tax climbed 81.6 percent to N526.1 billion. Total assets expanded to N30.6 trillion, with customer deposits reaching N21.9 trillion.

The results suggest that the earnings recovery is increasingly being driven by businesses beyond conventional lending.

Non-interest income rose sharply to N497.1 billion, supported by growth in electronic banking, trade finance, funds transfer, brokerage, asset management and investment banking businesses.

The group’s investment banking and asset management subsidiaries generated approximately N46 billion in gross earnings and N27.4 billion in profit before tax during the period, highlighting the growing contribution of fee-based businesses to earnings diversification.

The board also pointed to the successful restoration of FirstBank’s Capital Adequacy Ratio above regulatory minimum requirements ahead of schedule, describing it as evidence that the recapitalisation programme, earnings retention strategy, and tighter risk management framework are producing results.

The announcement comes as Nigerian banks continue balancing shareholder expectations with higher regulatory capital requirements following the Central Bank of Nigeria’s recapitalisation programme.

Rather than prioritising capital preservation alone, FirstHoldCo is signalling confidence that it can simultaneously fund expansion, meet regulatory capital thresholds, and reward shareholders.

The company said it remains on course to achieve its N1 trillion paid-in capital target while maintaining sufficient flexibility to deploy capital across its businesses and pursue future growth opportunities. It also cited successful rights issues and private placement exercises as evidence of renewed investor confidence in the group’s strategic direction.