Shares of First Holdco Plc rebounded sharply in early trading on Tuesday, rising nearly 10 percent, as value-oriented investors moved in after a steep post-earnings sell-off triggered by the lender’s decision to take a large one-off impairment charge.
The stock climbed to N45.15 by mid-morning, up N4.10 or 9.99 percent, recovering part of the losses recorded after the group reported a sharp decline in full-year profit. The rally came amid renewed buying interest on the Nigerian Exchange, with investors positioning for a turnaround following what analysts describe as a decisive clean-up of the group’s balance sheet.
First Holdco, the holding company of First Bank of Nigeria, had reported a 92 percent drop in profit after tax, largely driven by a N748.13 billion impairment charge booked in the fourth quarter of 2025. The move, one of the largest single write-downs in the bank’s history, weighed heavily on sentiment last week and sent the share price tumbling.
However, the early rebound suggests that some investors are viewing the sell-off as overdone, interpreting the impairment as a strategic reset rather than a signal of deeper structural weakness.
Market participants say the charge, which management described as a front-loaded effort to address legacy non-performing exposures, has materially reduced balance sheet risk ahead of the next growth cycle. By absorbing the impact in one period, the group is expected to enter 2026 with improved asset quality and greater earnings visibility.
Analysts at Meristem Research said the impairment and the group’s exit from regulatory forbearance marked an important turning point.
“Following the significant front-loading of impairment charges in Q4 2025 and the group’s exit from regulatory forbearance, we expect credit costs to normalise gradually, translating into improved earnings quality and real value creation from a cleaner balance sheet,” the firm said in a recent note.
Meristem placed a target price of N73.22 on the stock, implying an upside potential of about 63 percent from its closing level last week.
The market response also reflects growing confidence in the direction set by the company’s chairman, Femi Otedola, who has pushed for a more aggressive approach to resolving inherited asset quality issues. Investors betting on the stock argue that the impairment has effectively reset expectations and removed uncertainty that had weighed on valuation.
Still, analysts caution that near-term performance will remain under scrutiny. Coronation Research said investors would be closely watching upcoming quarterly results for confirmation that the balance sheet clean-up is translating into operational improvement.
“Given the weak Q4 2025 results, investors will watch the Q1 2026 results keenly for signs that the institution is now on a sustainable path of recovery after the significant balance sheet-correcting decisions taken in 2025,” the firm said in a February 2 note.
First Holdco’s rebound comes amid a broader environment of selective risk-taking on the Nigerian bourse, where investors have increasingly rotated into stocks perceived to offer long-term value after sharp price corrections.
While the stock remains well below levels seen earlier in the year, Tuesday’s rally signals a shift in sentiment, with the market beginning to price in the potential benefits of a cleaner balance sheet and a more transparent earnings base.