Otedola lifts First HoldCo stake to 25.87%, making it Nigeria’s most valuable bank

How Otedola pieced together a 25.87% holding in Nigeria’s oldest financial institution

Femi Otedola, the billionaire chairman of First HoldCo Plc, has sharply increased his grip on the company that controls First Bank in a rapid series of share purchases. Through his investment vehicle Calvados Global Services Limited, he bought 1.779 billion additional ordinary shares at N124.90 each, a deal worth N222.2 billion and disclosed to the Nigerian Exchange on Thursday. That follows an N77.59 billion purchase of 706.13 million shares just eight days earlier.

Together the two transactions commit nearly N300 billion of fresh capital, lifting Otedola’s total beneficial ownership from 21.96% to 25.87%, or 11.76 billion shares. At the latest transaction price the holding is estimated at N1.47 trillion — roughly $1 billion — making it one of the largest single‑shareholder positions in Nigeria’s financial‑services industry.

The stake leaves Otedola just over four percentage points shy of the 30% voting‑rights threshold set by the Investments and Securities Act 2025 and SEC rules. Crossing that line would normally require him to launch a mandatory takeover offer to minority shareholders unless the regulator grants an exemption. Market observers are watching closely to judge his next move.

The buying spree comes as First HoldCo completes a dramatic turnaround. A painful 2025 clean‑up — when profit after tax collapsed by 92% to N44.98 billion after a N748.13 billion impairment charge — is giving way to a much stronger 2026. Pre‑tax profit in the first half rose 83.5% to N653.54 billion, impairments fell by more than a third and the group recovered N60 billion in bad loans. Management is forecasting full‑year pre‑tax profit above N1.2 trillion. The re‑rating has pushed the stock up 145.9% year‑to‑date and lifted First HoldCo’s market cap past N5.5 trillion, overtaking Zenith Bank and GTCO to become the most valuable banking stock on the NGX.

Behind the accumulation: the 30% threshold, a clean balance sheet and a valuation re‑rating

The 30% takeover trigger is now a live question

Otedola’s 25.87% holding gives him a commanding voice but tempers the immediate regulatory pressure. Every additional block he buys erodes the buffer. The SEC can grant an exemption from the mandatory offer rule, but whether it would do so for a chairman who already controls the board is uncertain. A deliberate creep toward the threshold keeps all options open — a full offer, a negotiated exemption, or a strategic pause to let the bank’s own capital‑raising programme dilute minority holders’ relative weight.

First HoldCo’s earnings cleaned up just as the buying accelerated

The bank took a huge N748.13 billion impairment hit in 2025 to purge legacy non‑performing loans, sacrificing short‑term profit for a cleaner balance sheet. That reserve‑building exercise has now reversed: credit loss charges fell 37.4% in the first half, recovering N60 billion in bad loans and lifting net interest income after impairment to N762.99 billion. The combination of better asset quality, rising interest income from a liberalised exchange rate regime and growing transaction‑banking fees has transformed earnings. A forecast of N1.2 trillion pre‑tax profit for 2026 — if achieved — would be a record for a Nigerian bank and would justify the stock’s sharp re‑rating.

A valuation gap closes, leaving peers behind

First HoldCo now trades at about 1.7x book value, with annualised return on average equity near 30%. That multiple is closer to leading pan‑African banking groups than to historically discounted Nigerian peers. The market is rewarding the combination of a credible capital plan — the bank is targeting N1 trillion in paid‑up share capital, having already met the CBN’s minimum for international banks — with improving profitability. Zenith Bank and GTCO, which had long commanded premium valuations, have been overtaken in market‑cap terms, a shift that reflects both the earnings differential and the signal Otedola’s personal capital commitment sends to other investors.

What Otedola’s near‑control and First HoldCo’s turnaround mean for investors, peers and regulators

• For minority shareholders: Otedola’s 25.87% holding makes any further purchases highly visible and could push the stock toward the N124.90 acquisition price. If he crosses 30% and launches a mandatory offer, the offer price would have to match or exceed the highest price he paid in the preceding 12 months. Those holding out for a takeover premium will watch his ownership percentage and any SEC rulings closely.
• For Zenith and GTCO: First HoldCo’s 1.7x book valuation and 30% ROE raise the bar. Competitors that still trade below book value will face pressure to narrow the discount by accelerating their own capital‑return and asset‑quality improvements — or risk further multiple compression as investors reallocate to the new leader.
• For the Central Bank of Nigeria and SEC: The rapid accumulation tests the new takeover rules. The CBN’s ongoing recapitalisation drive means First HoldCo is already well‑capitalised; the SEC must decide whether a chairman creeping toward control warrants a waiver or a formal offer. The outcome will set a precedent for other banking consolidations.
• For First HoldCo management: The fresh capital from Otedola’s purchases and the private placement means the bank can deploy funds into loan growth immediately. With a N1.2 trillion pre‑tax profit target, the pressure is on to sustain the recovery in non‑performing loans, keep impairment charges low and maintain operating efficiency — otherwise the valuation premium that has already been priced in could quickly unwind.