First HoldCo Plc, Nigeria’s most valuable banking group by market capitalization, expects its profit before tax to exceed N1.2 trillion ($876 million) for the full year 2026. This projection is attributed to its ongoing recapitalization drive and a clean-up of legacy bad loans.

Olusegun Alebiosu, Chief Executive Officer of FirstBank, shared this outlook in an interview with Bloomberg. He linked the improved forecast to fresh capital from the Group’s recapitalization program, tighter cost control, and stronger recoveries from its non-performing loan book.

First HoldCo has recovered N60 billion in bad loans so far this year as part of its balance sheet clean-up efforts. The Group also cut both operating and funding costs, supporting margin expansion in the first half of the year.

Net income for H1 2026 rose 82% year-on-year to N522.7 billion, a significant turnaround from the prior year. In 2025, the bank’s profit had collapsed by 94% after setting aside heavy provisions following the Central Bank of Nigeria’s directive ending regulatory forbearance on delinquent loans.

Alebiosu anticipates the non-performing loan (NPL) ratio to fall below 10% by next year, down from its current 13.9%, as the bank restructures troubled oil-sector exposures.

First HoldCo’s turnaround follows one of the sharpest re-ratings on the Nigerian Exchange this year. The Group recently surpassed Zenith Bank and GTCO to become Nigeria’s most valuable lender by market capitalization.

Its share price more than doubled in 2026, reaching a record N110 per share. This rally follows several capital-raising milestones, including a N253 billion multi-tranche capital program approved by shareholders in May.

FirstHoldCo aims to increase its paid-up capital to N1 trillion to cement its compliance with the CBN’s revised minimum capital requirements for banks with international authorization.

However, analysts at Lagos-based ARM Securities cautioned that the growth was not primarily driven by lending activity. They noted that sustaining the pace of profit growth would depend on the bank’s ability to preserve margins and continue generating trading, FX, and recovery-related income, which tend to be less predictable than core lending income.

First HoldCo’s 2025 financial year was characterized by a deliberate balance sheet reset, where the Group absorbed a large impairment charge tied to CBN’s forbearance directive. This one-off hit sharply reduced full-year profit, creating a low base against which 2026’s rebound appears dramatic.

The N1.2 trillion PBT target, if achieved, would represent a significant scale-up from the N653.54 billion pre-tax profit First HoldCo posted for H1 2026 alone. This suggests management expects the momentum from loan recoveries and cost discipline to be sustained, if not improved, through the second half of the year.

The Group’s non-banking arms, including investment banking and asset management, have also begun contributing more meaningfully to earnings diversification. This trend is central to First HoldCo’s long-term growth strategy beyond traditional banking income.

The stock’s share price rose sharply from about N69.20 on July 10 to close at N110 on Wednesday, July 22, indicating approximately a 58.9% increase in barely two weeks. Whether the bank can hit the N1.2 trillion mark will likely hinge on its ability to maintain improved margins and whether trading, FX, and recovery gains continue to drive the bulk of earnings growth into year-end.