E-Financial
If Capital is the Answer, What Exactly is the Problem with First Holdco
By Blaise Udunze
The Olayemi Cardoso-led Central Bank of Nigeria’s 24-month compliance timeline for the recapitalization of Nigeria’s banking system is about to conclude on March 31, 2026, which is framed as an unavoidable solution to systemic fragility, weak balance sheets, and the demands of a larger, more complex economy. Bigger capital, regulators argue, will produce stronger banks.
Though First Bank may have met the CBN’s N500 billion minimum requirement, the latest financials from Femi Otedola-led First HoldCo Plc, which is the parent of Nigeria’s oldest commercial bank, offer a sobering counterpoint, revealing that capital alone cannot cure structural weakness, governance failure, or deep-rooted risk management flaws. If capital is the answer, what exactly is the problem?
What is truly astonishing to many is that beneath the headline growth in earnings lies a financial institution struggling with collapsing earnings quality, surging credit impairments, volatile fair-value exposures, and rising operating inefficiencies. First HoldCo’s numbers are not merely a company-specific disappointment; they are a mirror reflecting the deeper fault lines within Nigeria’s financial system and a warning that recapitalisation, in its current form, risks becoming another cosmetic reset rather than a genuine reform.
On the surface, the topline appears encouraging. The figures showed that gross earnings rose by 17.1 percent to N2.64 trillion in the nine months to 2025, while interest income surged by over 40 percent to N2.29 trillion. Figuring it out, investors, depositors, and analysts understand that these figures, however, are largely the product of a high-interest-rate environment driven by aggressive monetary tightening. They reflect repricing, not necessarily improved lending quality or superior balance-sheet strength. In an economy under strain, rising interest income often signals the transfer of macroeconomic stress from borrowers to banks, rather than sustainable growth.
This becomes evident once attention shifts from revenues to profitability. The performance disclosed that profit before tax declined by 7.3 percent to N566.5 billion, while profit after tax fell nearly 13 percent to N458 billion. Earnings per share dropped by a steep 27.7 percent, a sharper decline than headline profit suggests, pointing to dilution pressures and reduced value accruing to shareholders. More striking still is the full-year picture, where profit after tax from continuing operations collapsed by about 92 percent, plunging to N52.7 billion from N663.5 billion in the prior year. Such a dramatic fall cannot be explained by temporary volatility; it is the consequence of long-suppressed risks finally surfacing.
The most damaging of these risks is asset quality. The most critical figure is the impairment charges that rose by nearly 69 percent in the nine months to N288.9 billion, and by over 75 percent on a full-year basis to N748 billion, and invariably, these numbers tell a story of borrowers buckling under FX exposure, weak cash flows, and a deteriorating operating environment. They also raise uncomfortable questions about credit underwriting standards, concentration risk, and the effectiveness of internal risk controls in earlier lending cycles. After impairments, much of the benefit from higher interest income evaporated, exposing the fragility of earnings built on stressed credit.
Compounding this weakness was a sharp reversal in fair-value accounting. First HoldCo recorded a net loss of N87 billion on financial instruments measured at fair value, a stark contrast to the N549 billion gain recorded a year earlier. Due to this outcome, larger chunks of shareholders’ value were wiped out because this single swing accounted for a negative variance of over N636 billion year-on-year.
The episode highlights a dangerous dependence on market revaluations and FX-driven gains to prop up earnings, as seen that the moment conditions turn, paper profits vanish just as quickly, raising questions about the transparency, sustainability and economic substance of reported results.
Non-interest income provided little cushion. In the nine months to 2025, it declined by 44.5 percent, falling from N618.7 billion to N343.7 billion. While net fees and commission income rose by about 25 percent, the increase was too small to offset the collapse in other income lines. The result is a revenue base that is narrow, volatile, and overly exposed to market swings. Recapitalising banks without addressing this lack of income diversification simply amplifies vulnerability.
At the same time, operating costs surged. Operating expenses climbed by nearly 40 percent to N942.7 billion, while other operating expenses jumped over 43 percent on a full-year basis. Inflation, FX depreciation, energy costs, and technology spending all played a role, but the deeper issue is efficiency. Costs are rising far faster than sustainable income, eroding margins and weakening internal capital generation at precisely the moment banks are being asked to shore up capital buffers. Injecting fresh capital into institutions with broken cost structures does not resolve inefficiency; it merely postpones the inevitable days.
These financial stresses revive longstanding concerns about governance and risk culture in Nigeria’s banking system. Large impairment charges and valuation reversals do not emerge overnight. They accumulate through years of weak credit governance, excessive sector and obligor concentration, insider-related exposures, inadequate stress testing, and regulatory forbearance. Recapitalisation does not answer the most important questions: who gets credit, how risks are approved, how boards exercise oversight, and whether management is truly accountable. Without reform in these areas, more capital simply provides a thicker cushion for future losses.
Foreign exchange risk remains the system’s most dangerous and least resolved fault line. Currency devaluation inflates asset values and boosts interest income on paper, while simultaneously crushing borrowers with FX-denominated obligations. Banks may book translation or revaluation gains even as credit quality deteriorates beneath the surface. This contradiction fuels earnings volatility and undermines confidence in financial reporting. A stronger capital base does not neutralise FX mismatch risk; only disciplined risk management, credible macro policy, and transparent reporting can.
Perhaps most troubling is what First HoldCo’s results imply about regulatory credibility. Many of the impairments and valuation losses reflect risks that were visible long before they crystallised in the income statement. When losses arrive suddenly and in clusters, concerns from different quarters are raised and markets begin to question whether supervision is proactive or merely reactive. Recapitalisation without restoring trust in regulatory oversight risks being interpreted as an admission that deeper problems remain unaddressed and by extension, this erodes trust in the system and a stronger banking sector must also be a fairer and more accountable one.
Nigeria has travelled this road before. Bigger banks and higher capital thresholds have previously delivered reassuring headlines, only for familiar weaknesses to resurface in new forms. First HoldCo’s numbers demonstrate that capital adequacy, while necessary, is far from sufficient. Without the CBN confronting governance failures, asset quality deterioration, concentration risk, FX exposure, transparency gaps, and weak risk culture, recapitalisation risks will become another exercise in delay rather than reform.
The uncomfortable truth is that real stability requires more than fresh equity. It demands honest loss recognition, credible financial reporting, disciplined credit practices, diversified income streams, and regulators willing to enforce standards consistently. Until these missing pieces are addressed, recapitalisation will remain what it too often has been in Nigeria’s financial history, as a larger buffer for the same old problems, and a temporary comfort masking unresolved fragilities.
Blaise, a journalist and PR professional, writes from Lagos, can be reached via: [email protected]
Securities and Exchange Commission (SEC) has commenced the implementation of a fully electronic registration process for capital market operators, enabling designated regulatory services to be completed entirely online as part of efforts to modernise Nigeria’s capital market and improve regulatory efficiency.
In a statement issued on Wednesday, the Commission said the new electronic registration (e-Registration) platform, deployed through its ePortal, marks another milestone in its digital transformation agenda and its drive to build a technology-driven regulatory environment.
SEC explained that the platform allows Capital Market Operators (CMOs) to complete designated registration processes online, covering application submission, regulatory review, approvals and communication of decisions, thereby eliminating manual processing for the services included in the current phase.
The Commission said the initiative is expected to simplify regulatory interactions, reduce administrative bottlenecks, shorten processing timelines and provide applicants with greater visibility into the status of their applications.
It added in the statement that the migration to a fully digital registration system would improve operational efficiency while strengthening regulatory oversight through standardised workflows, electronic documentation, secure digital record management and enhanced audit trails.
“The new platform represents a major step towards creating a seamless digital regulatory ecosystem that enhances operational efficiency while strengthening regulatory effectiveness,” the Commission said.
Furthermore, SEC explained that the e-Registration platform aligns with its strategic objective of leveraging technology to improve market efficiency, enhance the ease of doing business, and deliver better services to stakeholders.
“Beyond improving efficiency, the platform will enhance the integrity of regulatory processes by reducing delays associated with paper-based documentation and improving the quality of regulatory data for decision-making.
“The digital platform would also provide a stronger foundation for regulatory analytics and future innovations aimed at improving oversight of Nigeria’s capital market”.
SEC said the implementation is being carried out in phases to ensure a smooth transition for market participants while maintaining the stability and integrity of regulatory processes.
It clarified that the current phase is limited to post-registration services for existing Capital Market Operators, adding that applications for the registration of new entrants into the Nigerian capital market are not yet covered.
“The commencement of electronic processing for new registration applications will be announced at a later date.”
It urged all Capital Market Operators to familiarise themselves with the new platform and comply with implementation timelines to ensure a seamless transition to the electronic registration process.
It said the initiative forms part of its broader modernisation agenda designed to improve regulatory efficiency, strengthen market infrastructure, enhance transparency and support the continued growth, resilience and global competitiveness of Nigeria’s capital market.
National Insurance Commission (NAICOM) has revoked the operating licence of Nigeria Reinsurance Corporation over its failure to meet the statutory Minimum Capital Requirement (MCR).
It has appointed Dr. Muiz Banire (SAN), as receiver/provisional liquidator to wind up the company’s affairs.
The appointment took effect on August 3, 2026, following the cancellation of the corporation’s certificate of registration by the insurance regulator.
In a notice dated August 4, Banire said he was appointed by NAICOM, in the exercise of its statutory powers, to take charge of the receivership and liquidation of Nigeria Reinsurance Corporation (RR-002).
According to the notice, the company’s licence was revoked after it failed to comply with the prescribed Minimum Capital Requirement applicable to its category of licence within the stipulated compliance period, in accordance with the Nigerian Insurance Industry Reform Act (NIIRA) 2025 and other extant laws, regulations and guidelines.
Banire said his appointment empowers him to immediately trace, recover, secure and take possession of all assets belonging to the company; collate and settle its liabilities in accordance with the NIIRA 2025; liaise with NAICOM on matters relating to the liquidation; and submit periodic reports to the Commission.
He directed banks, financial institutions, insurance policyholders and members of the public not to honour any instruction relating to the company except those issued by him or persons expressly authorised by him.
As part of the liquidation process, Banire said all bank accounts belonging to Nigeria Reinsurance Corporation had been frozen with immediate effect, pending further directives from his office.
He warned that any transaction carried out without his authorisation would be at the risk of the parties involved.
“Members of the general public, banks and financial institutions in Nigeria are hereby informed that no financial transactions should be conducted pursuant to any instruction from anyone except those that I issue as the Receiver/Provisional Liquidator,” the notice stated.
According to him, only instructions bearing his official seal and stamp as a legal practitioner, or those issued by persons duly authorised by him, will be recognised throughout the liquidation process.
The regulatory action marks a significant enforcement measure by NAICOM and underscores the Commission’s resolve to ensure that insurance and reinsurance companies operating in Nigeria comply with statutory capital requirements designed to safeguard policyholders and strengthen the financial stability of the industry.
The liquidation process is expected to involve the recovery and realisation of the company’s assets, the verification and settlement of valid claims and liabilities, and the orderly winding up of its affairs in accordance with the provisions of the law.
The notice reminds policyholders, creditors, banks and other stakeholders that all dealings concerning Nigeria Reinsurance Corporation must henceforth be channelled through the Receiver/Provisional Liquidator until the liquidation process is concluded.
E-Financial
Access Holdings Deepens Sustainable Finance Impact, Expanding Green Assets to ₦92.14 Billion
Access Holdings Plc has published its Sustainability Report for the year ended 31 December 2025 on the Nigerian Exchange Limited, demonstrating how the Group is translating sustainability commitments into measurable business, environmental and social outcomes.
The report shows a green asset portfolio of ₦92.14 billion, a 28.47 per cent reduction in operational greenhouse gas emissions against its 2022 baseline and expanded access to finance for about 2.53 million low-income individuals.
The report reinforces the Group’s strategic shift from scale to value by showing how sustainability is being embedded in capital allocation, risk management, product development and operations.
Access Bank Plc, the Group’s largest subsidiary, accounts for a significant portion of the reported outcomes.
The green asset portfolio has grown from ₦22 billion in 2021 and ₦72.32 billion in 2024 to ₦92.14 billion at year-end 2025, advancing towards the Group’s long-term target of ₦475 billion. During the year, Access Holdings deployed ₦72.3 billion under its Sustainable Finance Framework to eligible environmentally beneficial projects and grew its cumulative sustainability-focused loan book to US$1.269 billion.
The emissions reduction reported in 2025 reflects operational changes designed to lower the environmental footprint of the Group’s activities. Operational emissions fell to 49,352 tonnes of carbon dioxide equivalent from 57,176 tonnes in 2024, supported primarily by branch solarisation across 263 locations and the deployment of 323 solar-powered ATMs, largely across Access Bank in Nigeria. The Group applies the operational-control approach under the Greenhouse Gas Protocol, accounting for emissions across its African footprint, with Access Bank representing the largest share.
Beyond environmental outcomes, the report highlights the Group’s contribution to inclusive economic participation. In 2025, Access Holdings extended access to finance to 2,528,117 low-income individuals and onboarded 78,438 new MSMEs onto its financing platform.
Across the Group, 2.8 billion transactions were processed during the year, underscoring the institution’s role as core financial infrastructure for Africa’s real economy. Gender-lens lending also progressed, with 354,156 loans extended to women and women-owned businesses, totalling ₦67.4 billion, equivalent to 24 per cent of the relevant loan portfolio.
The Group’s Corporate Social Investment programmes reached 2,439,480 beneficiaries across education, health, entrepreneurship and the environment, delivered with partners including UNICEF, HACEY Health Initiative and the Kenya Forest Service. Employees recorded 359,500 volunteer hours with 100 per cent participation, while more than 50,000 trees were planted.
The Group notes that 2025 community figures follow a Board-mandated tightening of its impact-measurement methodology and are not directly comparable with prior years. Women represent 49 per cent of the workforce, and the Access Holdings Board comprised nine directors with 44.4 per cent female representation. Employee satisfaction rose to 87 per cent against an 80 per cent target, while attrition eased from about 13 per cent to about 11 per cent.
To strengthen credibility and comparability, the report was prepared using the IFRS Sustainability Disclosure Standards, specifically IFRS S1 and IFRS S2, as the primary framework, with the GRI Standards (2021) and the SASB Standards applied as complementary references. Selected disclosures were independently assured by CSR-in-Action Consulting Limited under ISAE 3000 (Revised) on a hybrid reasonable and limited assurance basis.
Sustainability governance is integrated into senior oversight and credit decision-making. The Board Human Resources and Sustainability Committee oversees the agenda, supported by the Board Risk Management Committee. Climate and ESG risk is reflected in capital planning through the ICAAP, while an ESG Toolkit is embedded in the credit-approval system, enabling facilities to be screened against IFC Performance Standards and the Equator Principles.
The Group also reported zero material regulatory penalties relating to sustainability for a second consecutive year and zero cybersecurity breaches.
Access Holdings mobilised US$185.38 million, equivalent to ₦266.83 billion, in concessional funding from development finance institutions during the year and allocated a sustainability budget of ₦4.8 billion from profit before tax.
Sales-facing staff in the banking subsidiary carry green-portfolio targets within their individual performance measures, linking strategic sustainability goals to day-to-day execution across governance, strategy, risk management, capital allocation, products and operations.
Commenting on the report, Innocent C. Ike, Group Chief Executive Officer, Access Holdings Plc, said: “Our 2025 Sustainability Report reflects the discipline with which we are converting scale into value. We reduced operational emissions by 28.47 per cent, grew our green asset portfolio to ₦92.14 billion and extended financial access to about 2.5 million low-income individuals.
These outcomes show that sustainability is not separate from our business; it is central to how we create value, manage risk and support inclusive growth across Africa.”
Looking ahead, the Group will focus on deepening the measurable impact of its sustainability agenda, accelerating the transition of its portfolio towards low-carbon and climate-resilient assets, growing the green asset portfolio towards the ₦475 billion target.
It will also improve data quality for financed and Scope 3 emissions through adoption of the PCAF methodology, scaling renewable-energy adoption, deepening development finance partnerships, and further integrating climate risk into financial planning.
Consistent with its mission to be the most respected African financial services group, Access Holdings frames these commitments as a disciplined, evidence-based approach to building long-term value for customers, communities, shareholders and the wider African economy.
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