First HoldCo has adopted a new dividend policy committing to pay out at least 60 percent of its annual post-tax profit, a decisive pivot to shareholder returns after absorbing one of the largest loan-loss provisions in Nigerian banking history.
The company’s board approved the policy at a meeting held on Tuesday, First HoldCo disclosed in a regulatory filing released on Thursday.
The shift, the group said, reflects growing confidence among its directors in the sustainability of its earnings, the strength of its capital base, and the trajectory of its loan book even as it represents a deliberate departure from a more conservative approach that would have retained a larger share of profits to fund growth.
The new policy offers a measure of vindication to investors who went without a payout entirely for the 2025 financial year, the first such drought in many years after the group absorbed a ₦748.1 billion provision to clean up problem loans still sitting on its books from the Covid-19 era.
The provisioning exercise followed a directive from the Central Bank of Nigeria instructing lenders that had relied on regulatory forbearance during the pandemic to fully recognize and clear out the resulting toxic assets, in line with international best practice.
The scale of that clean-up was severe enough to nearly wipe out the group’s bottom line. Profit for 2025 collapsed to ₦147.3 billion, down from ₦663.5 billion the year before, a decline of roughly 92 percent.
First HoldCo was not alone in feeling the regulatory squeeze. United Bank for Africa and Access Holdings, two of its largest peers, were similarly forced to withhold dividends for the 2025 financial year as they too worked through forbearance-related exposures under the same central bank directive.
The group’s chairman, Femi Otedola, has been unusually candid about the toll the exercise took on the headline numbers, framing it in January as a necessary act of transparency rather than a sign of weakness.
“At First HoldCo, we decided to clean house properly. We took a huge one-time hit of ₦748 billion to admit old bad loans instead of pretending they do not exist,” Otedola said at the time. “That is why profit looks like it crashed by 92 percent. A painful headline, but it is a serious long-term move.”
In Thursday’s statement announcing the new dividend policy, Otedola struck a more forward-looking tone, pointing to a broader campaign of institutional repair that has been underway for roughly two years.
“Over the last two years, we have undertaken difficult but necessary actions to strengthen governance, clean up the balance sheet, restore confidence, rebuild capital, and reposition the group for long-term growth,” he said. “We are now beginning to see the benefits of those strategic decisions.
As performance continues to improve across our businesses, it is only appropriate that our shareholders participate more directly in the value being created.”
The board’s willingness to commit to returning the bulk of future profits appears underpinned by a sharp rebound in performance in the first half of 2026. Revenue climbed 16.7 percent to ₦1.9 trillion over the period, while pre-tax profit nearly doubled to ₦653.5 billion from ₦356.1 billion a year earlier.
After-tax profit showed an even steeper improvement, jumping to ₦526.3 billion from ₦283.8 billion.
Taken together, the figures suggest a group that has moved past the worst of its balance-sheet reckoning and is now generating profit growth robust enough to support a materially more generous payout ratio without jeopardizing its capital position.
Beyond the immediate cash benefit to shareholders, the policy shift functions as a statement of institutional intent.
By committing to distribute at least three-fifths of post-tax profit annually, First HoldCo’s board is effectively betting that the bank’s earnings power, asset quality, and diversified revenue base are now durable enough to sustain both aggressive shareholder returns and continued balance-sheet strength a wager that will be tested as the industry moves further away from the pandemic-era forbearance regime that forced so much of the sector’s recent pain into the open.
For now, though, the message to the market is unambiguous: after a year of enforced austerity, First HoldCo’s shareholders are being told the lean period is over.
WHAT YOU SHOULD KNOW
First HoldCo’s shift to a 60%-minimum dividend policy is the clearest signal yet that its ₦748.1 billion loan clean-up in 2025 which crushed profit by 92% was a one-off reset, not a sign of lasting weakness.
With H1 2026 profit already up sharply and capital rebuilt, the board is betting the worst is over and choosing to reward shareholders accordingly.
The painful hit was deliberate and temporary, and management now sees strong enough underlying earnings to back it up with cash.
