SEVEN GATES RESEARCH · NOTE
First HoldCo: The Old Bank, the New Money and the Shareholder Waiting Room
First HoldCo's H1 2026 recovery is real. So are the ownership reshuffle, recapitalisation burden and the long memory of its loan book.
Nigeria's oldest bank has new capital, new power and remarkably improved profits. It has not, however, acquired a new history.
The Lokoja Contrarian10 August 202611 min read
First HoldCoFirstBankNGXH1 2026Governance
FirstBank has survived empire, independence, military rule, several currencies, banking consolidations and a Nigerian habit of treating corporate governance as optional upholstery. H1 2026 suggests the old institution is recovering. The market, which can be sentimental when profit rises by 80%, has already ordered champagne.
At the 7 August close of ₦145.40, First HoldCo was worth roughly ₦6.61 trillion. That is nearly five times the price at which a 22.94% block changed hands thirteen months earlier and more than three times the ₦44 price of the recent private placement. The earnings recovery is substantial. So is the amount of optimism now sitting in each share.
H1 2026: the patient has left intensive care
Gross earnings rose 16.7% to ₦1.93 trillion, operating income increased 25.8% to ₦1.38 trillion, and profit before tax climbed 83.5% to ₦653.54 billion. Profit after tax reached ₦526.13 billion. The improvement came from stronger non-interest income, lower impairment pressure and better operating leverage after the heavy cleanup of 2025.
Six-month scorecard
Group figures for H1 2026 versus H1 2025.
MeasureH1 2026H1 2025 / change
Gross earnings₦1.93tn₦1.66tn · +16.7%
Operating income₦1.38tn₦1.09tn · +25.8%
Profit before tax₦653.54bn₦356.15bn · +83.5%
Profit after tax₦526.13bn₦289.76bn · +81.6%
Basic EPS₦11.74₦6.84 · +71.6%
Total assets₦30.65tn₦27.25tn · +12.5%
The quality of that growth needs adult supervision. Net interest income eased to about ₦879 billion, while fee and commission income improved and other operating income rose sharply. Some of H1 is therefore an enduring franchise earning money from customers. Some is a balance sheet enjoying easier comparisons after a painful provisioning year. Investors should resist turning one clean half into a permanent annuity.
Total assets rose to ₦30.65 trillion, customer deposits to ₦21.93 trillion and customer loans to ₦9.51 trillion. This remains an enormous banking franchise. The attraction is not novelty. It is distribution: branches, transaction flows, corporate relationships, deposits, payments and a name known from Lagos to the smallest state capital. Rebuilding that network would be expensive. Rebuilding trust is more expensive still.
An old bank with several lives
FirstBank began in 1894 as the Bank of British West Africa. For much of modern Nigerian history it was less a bank than a piece of national plumbing. It financed trade, held government business and developed a deposit franchise competitors could admire but not quickly reproduce. Scale also accumulated bureaucracy, political relationships and a loan book that occasionally confused size with safety.
The difficult modern chapter arrived in the last decade. Non-performing loans rose sharply, large insider and connected exposures strained the balance sheet, and regulators forced changes at the bank and holding company. The CBN's 2021 intervention removed the boards after a governance confrontation. Years of forbearance, recoveries and provisioning followed. The 2025 accounts finally took a much heavier charge against legacy problem assets. H1 2026 is the first persuasive evidence that the franchise can earn properly after that surgery.
Otedola, Otudeko and the bridge in the middle
Femi Otedola is now chairman, strategic investor and the central force in the new order. He began accumulating shares in 2021 and has continued through placements and market purchases. By early August 2026, reported beneficial ownership had moved to roughly a quarter of the company, with another acquisition disclosed on 6 August. His money is committed, not merely his stationery. That alignment is valuable. His stated preference for majority positions also means the control question is not finished.
Oba Otudeko represents the previous era. Through Barbican Capital and associated interests, he returned as the largest shareholder after an earlier regulatory exit, before Barbican and Leadway sold a combined 10.43 billion shares in July 2025. That transaction removed Otudeko and Oye Hassan-Odukale from the immediate shareholder battle. It did not make the block disappear.
RC Investment Management is the bridge holder. It acquired those 10.43 billion shares, equal to 22.94% of First HoldCo, at about ₦31 per share. In August 2026 it began offering the block at an indicative ₦110. This is a secondary sale: First HoldCo receives no proceeds. The identity and intentions of the eventual buyers matter because a block of this size can reshape control, board influence and free float. RC is therefore not a mysterious new operating shareholder in the ordinary sense. It is the waiting room between the old ownership and whatever comes next.
Recapitalisation: necessary, but not free
The CBN's new capital regime requires FirstBank to strengthen paid-in capital. The group raised ₦150 billion through a rights issue, embarked on a ₦350 billion private placement and has approval for further issuance. Fresh capital should support compliance, technology and growth. It also dilutes anyone who does not participate and raises the hurdle for management: a larger equity base must produce higher sustainable earnings per share, not merely a larger annual report.
This distinction has been muddied by reports describing RC's block sale as a $1 billion capital raise. It is not. Selling existing shares changes ownership. Issuing new shares capitalises the company. Shareholders should know which pocket receives the money before applauding the size of the transaction.
Valuation: cheap earnings, expensive expectations
Annualising H1 EPS of ₦11.74 produces a flattering forward earnings multiple of roughly 6.2 times at ₦145.40. That looks inexpensive beside many global banks. It is less obviously cheap once we acknowledge that H1 benefited from an unusually sharp rebound in non-interest income and easier impairment comparisons. The correct question is not whether First HoldCo can repeat six months twice. It is what a clean, normally provisioned FirstBank earns through a full cycle.
Bear**₦80–₦100**
Fresh asset-quality problems, expensive recapitalisation and earnings normalisation expose the rerating.
Base**₦115–₦145**
The cleanup broadly holds, capital is completed and sustainable earnings settle below the H1 run-rate.
Bull**₦165–₦190**
Legacy risks stay contained, fees and deposits compound, and Otedola's capital discipline improves per-share returns.
At the reference price, the shares sit at the top of our broad base range. Existing holders can justify staying in the room while the recovery develops. A new buyer is no longer purchasing an ignored old bank. He is purchasing a celebrated turnaround during an unresolved transfer of power. That can work. It is simply not the same bargain.
What matters from here
Five items to test each quarter.
GateWatchWhy it matters
Asset qualityNPL ratio, coverage and fresh Stage 2 migrationThe recovery must survive ordinary lending, not merely legacy cleanup.
CapitalFirstBank paid-in capital and completion of the recapitalisation planA holding-company rally is not regulatory capital at the bank.
OwnershipFinal destination of RC Investment's 22.94% blockControl and minority alignment remain unfinished business.
Earnings qualityFees, trading income, impairments and cost growthH1 profit should be separated into repeatable banking income and unusually kind arithmetic.
Per-share returnsBook value, EPS and dividends after new sharesMore capital only creates value if each share earns more over time.
The Seven Gates view
The business economics are attractive: an irreplaceable deposit franchise, national distribution and a healthier income statement. Financial integrity is improving but not yet beyond question because legacy exposures, NPL coverage and the quality of non-interest income still require observation. Governance has become more decisive under Otedola, although concentrated ownership and the final placement of RC's block introduce a different form of risk. Capital allocation is the decisive gate. The new money must earn more than it costs.
FirstBank has changed. The profits say so. The shareholders say so. The market certainly says so. History, being the least excitable member of the committee, would like another few quarters.
Research basis: First HoldCo H1 2026 unaudited results and Q1 2026 press release; NGX company and directors' dealings disclosures; company statements on the July 2025 block transaction; public reporting on RC Investment's August 2026 secondary offer. Reference price: ₦145.40 at the 7 August 2026 close; market capitalisation approximately ₦6.61tn using 45.48bn shares. Valuation ranges are Seven Gates estimates, not personal investment advice.