Following FIRSTHOLDCO's H1'25 financial results, where PBT and PAT declined to N356.1 billion (-13.6% YoY) and N289.8 billion (-20.7% YoY), respectively, we have revised our FY'25 estimates accordingly. We maintain our view of diverging earnings dynamics through the 2025 financial year, with a resilient core income line offset by softening non-core revenue.
In this report, however, our emphasis shifts to asset quality in light of recent regulatory developments. Specifically, the directive of the Central Bank of Nigeria (CBN) requiring banks to unwind forbearance exposures and comply with the stipulated Single Obligor Limit (SOL) has been focused on. Guided by management's stated commitment to fully exit these positions within 2025, we have revised our assumptions on non-performing loans (NPLs), loan loss provisioning, and overall cost of risk. We expect management to renegotiate tenor for some forbearance-linked facilities and stagger provisionings for the rest across the year, given the limited scope for gross earnings to absorb them in a single period.
