VFD Group PLC, the proprietary investment firm turned financial holding company, extracted a massive 39.4% blended interest rate from its credit portfolio in 2025, even as it aggressively slashed its lending exposure in the final months of the year, according to MoneyCentral’s calculations.
The group reported ₦14 billion in interest income from a loan book that peaked at nearly ₦48 billion in September before being halved to just ₦24 billion by December.
The sharp year-end contraction suggests a strategic pivot toward liquidity preservation or a “derisking” exercise, as the firm offloaded or recovered nearly 50% of its outstanding credit in a single quarter.
The 39.4% Yield: Premium Pricing in a Tight Market
VFD’s blended rate of nearly 40% places it at the upper echelon of the Nigerian credit market, far exceeding the average lending rates of Tier-1 commercial banks:
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High-Octane Returns: The 39.4% yield reflects VFD’s positioning as a provider of high-stakes, short-term capital. Despite the shrinking book, Q4 saw the highest quarterly interest booking (₦4.26 billion), suggesting that late-year recoveries or exit fees significantly boosted the bottom line.
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Quarterly Velocity: Interest income grew steadily from ₦2.79 billion in Q1 to ₦4.26 billion in Q4, despite the massive liquidation of principal in the final three months.
The Q4 Liquidation: A ₦23 Billion Disappearing Act
The most striking feature of the 2025 filing is the rapid deleveraging seen in the fourth quarter:
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The Peak and Trough: After growing the loan book by 45% between March and September (peaking at ₦47.6 billion), VFD reversed course entirely. By year-end, the book had shriveled to ₦24 billion—its lowest level of the year.
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Strategic Recovery? The ₦23.6 billion reduction in the final quarter suggests a major “mop-up” of outstanding facilities. Analysts are watching to see if this liquidity was recycled into higher-yielding government securities or used to pay down the group’s own expensive short-term debt. VFD Group paid N40.18 billion as interest expense on borrowings in 2025.
Portfolio Sensitivity
The volatility in the loan book highlights VFD’s “merchant-style” approach to credit:
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Opportunistic Lending: Unlike traditional banks with “sticky” long-term loans, VFD’s book appears highly sensitive to market cycles, with the ability to ramp up or liquidate tens of billions of Naira in a matter of weeks.
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Risk Premium: The high blended rate indicates that VFD is pricing for significant risk, likely catering to corporate borrowers who are underserved by traditional banks or require rapid, bridge-style financing.
VFD Group shares are up 9.09% year-to-date outperforming the NGX-All Share Index which has gained 6.27% in the same period.
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