First HoldCo has transitioned to a liberal dividend policy, committing to distribute at least 60% of its annual post-tax profit as dividends. The decision was adopted by the board of directors during a meeting on Tuesday and announced in a regulatory filing on Thursday.
The policy shift prioritizes shareholder returns over retaining earnings for business growth. It offers relief to shareholders who received no dividends for the 2025 financial year due to a massive bad-loan provision.
Balance Sheet Clean-up and 2025 Earnings Hit
First HoldCo set aside ₦748.1 billion in 2025 to cover toxic assets following a Central Bank of Nigeria directive to clear forbearance loans from the Covid-19 era. This provision caused the group's annual profit to drop to ₦147.3 billion from ₦663.5 billion in the previous year.
Chairman Femi Otedola defended the decision, stating the group chose to clean house properly by taking a one-time hit rather than carrying bad loans. Similar regulatory pressures prevented peers like United Bank for Africa and Access Holdings from paying dividends in 2025.
Otedola, who recently increased his stake in First HoldCo to 26% by acquiring 1.78 billion shares, noted that these difficult decisions are now yielding results. He stated that as performance improves, it is appropriate for shareholders to participate directly in the value being created.
H1 2026 Financial Recovery
The financial institution recorded strong growth in the first half of 2026, with revenue rising 16.7% to ₦1.9 trillion. Pre-tax profit rose to ₦653.5 billion from ₦356.1 billion in the corresponding period of 2025.
Post-tax profit for the first half of 2026 reached ₦526.3 billion, up from ₦283.8 billion in H1 2025. The board expressed confidence that this improved earnings capacity and enhanced capital position will sustain the new dividend distribution policy.
