First Holdco’s operating expenses balloon to N809.4bn despite poor financial performance

FIRST Holdco’s operating expenses jumped by 44 percent to N809.362 billion in 2025, up from N563.706 billion reported in 2024, according to the group’s audited full-year 2025 financial statement.

Operating expenses are ongoing costs necessary for a company to maintain its day-to-day business activities, often impacting its profitability analysis, says Investopedia, a dictionary for finance and investing.

First Holdco, which is the parent company of Nigeria’s oldest bank First Bank, raised its directors’ emoluments to N6.109 billion, up from N5.018 billion in 2024. Cost of maintenance of First Holdco’s assets stood at N151.164 billion, up from N134.76 billion reported in 2024. In other words, First Holdco spent a lot of money keeping assets that might have reached their zenith, alive.

Financial analysts say this amounts to wasting money on assets that are not yielding sufficient revenue to cover the cost of their maintenance, wondering why the company did not outrightly write them off to save costs.

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“This should have been written off,” said a former banker and financial analyst, Mr Abimbola Ojudu. “You do not keep maintaining assets that aren’t yelding anything.”

The group’s advert and corporate promotions cost N185.781 billion, up 145 percent from N75.934 billion recorded in the previous year. Professional fees took N41.216 billion, marking a 10 percent increase from N37.496 billion in 2024. The group reported a year-on-year profit of N44.982 billion but posted a loss of N405.89 billion in the fourth quarter (Q4) of 2025.

Analysts expect a company that reported such poor financial performance to be measured in spending. But First Holdco’s donations and subscriptions stood at N5.078 billion, up 166 percent from N1.912 billion posted in full-year 2024. The group spent N5.664 billion on stationery and printing, up from N4.228 billion in 2024.

Also, the group posted a humongous N45.516 billion on communication, light and power, up from N34.619 billion reported in 2024. More so, First Holdco’s cash handling charges cost the organisation N7.871 billion, marking an increase from N5.673 billion in 2024.

Operational and other losses stood at N36.67 billion, up from N20.718 billion in 2024. The unaudited financial statement had shown that the company suffered N748.125 billion impairment loss for the whole of 2025 and N459.206 billion for the Q4 of 2025. This, in simple terms, means that loans had been granted to entities to the tune of N748.125 billion but they did not repay them. As a result, Nigeria’s oldest bank decided to write them off within a year.

In spite of these losses, the company chose to spend N34.803 billion on passages and travels, up 33.4 percent from N26.073 billion reported in 2024. Another item that puts First Holdco’s financial management to the test is the amount of money spent on outsourced cost. The group spent N52.242 billion on the item, a remarkable increase from N36.448 billion in 2024.

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First Holdco’s financial statement also shows that the ‘other operating expenses’ stood at N37.521 billion. Ordinarily, this should not worry anybody, but the size of the expenses is a source of concern.

In general, the company’s total operating expenses grew to N809.362 billion from N563.706 billion in 2024. However, the group paid an income tax of N176.344 billion in the full-year 2025, as against N132.977 billion in the corresponding period of 2024. While the tax might have emanated from disallowable expenses, prior period adjustments, or deferred tax write offs, analysts are wondering why a company whose shareholders suffered humongous loss in Q4 (N405.89 billion) would agree to pay that amount of tax over a year. Some say the company should have paid less than half of the tax, considering the circumstance in which it found itself.