AAG Capital Limited analysts have set a target price of N41.75 for First Holdco Plc, suggesting a 63% upside potential based on the current market price of N24.80. The upbeat forecast follows the company’s robust Q1 2025 performance, highlighted by a 40.2% year-on-year increase in interest income, reaching N625.3 billion, driven by a high-yield environment.
Despite a moderate rise in interest expense (18.6% YoY) and a slight growth in customer deposits (0.6%), First Holdco saw a 61% YoY rise in net interest income, reaching N365.2 billion. Net fee and commission income also saw solid growth, climbing 22.5% to N64.1 billion.
However, non-interest income faced a significant setback, with a 60% YoY drop to N104.1 billion, primarily due to a sharp decline in gains on financial instruments held at fair value. Operating expenses also rose by 16% YoY to N245.3 billion, contributing to a spike in the cost-to-income ratio to 52.3% from 43.3% in Q1 2024.
Despite the decline in pretax profit by 20.4% and a 17.9% dip in profit after tax, analysts remain optimistic about First Holdco’s long-term prospects, citing strong growth in credit-related fees and FX trading income.
