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mttssn research · Nordic Deep Dive
ABG Sundal Collier (ABG.OL)
Financials · Nordic investment bank / brokerage · LTM Q1 2026
Analysis date: 2026-06-15
Price at analysis: NOK 7.35
Method: mttssn_streamlined_v1
Conviction: MEDIUM
HOLD
Conviction: MEDIUM
A leading Nordic investment bank and brokerage (corporate finance, M&A advisory, secondary brokerage) — capital-light, net-cash and a near-full dividend payer (~7.5% variable yield). ROE is high (~36% LTM) but cyclical; on a normalized through-cycle ~28% ROE the Gordon fair value is ~NOK 7.3, roughly the current ~7.35 price. At 3.4x book / ~10.6x earnings it is owned for the variable yield, not a discount, with the Jan-2026 FIH Partners deal depressing near-term margins. HOLD; base NOK 7.3.
Return on Equity
32.9%
Cost of equity ~10.5%
Price / Book
3.34×
3.4× book (capital-light, near-full payout)
Fair P/B (Gordon)
3.98×
(ROE−g)/(COE−g); g 3%
Price / Target
NOK 7.35 → NOK 7.30
-1% base; HOLD
Price / Earnings
10.2×
~10.6× earnings
P / TBV
3.70×
Price / tangible book
Economic Profit
+NOK 252M
Residual income positive; ROE ~36% (norm ~28%) vs 10.5% COE
Equity (book)
NOK 1.1B
Equity ~NOK 1.0bn; FIH (Jan-26) consumed surplus capital
Thesis

ABG Sundal Collier is one of the Nordic region's leading independent investment banks — equity and debt capital markets, M&A advisory and secondary brokerage/research — a single-segment, fee- and commission-driven, capital-light business (no lending or asset-management balance sheet to speak of). It earns a very high ROE (~36% LTM, ~35% FY2025) and distributes nearly all of it: a ~7.5% dividend yield at a ~78% payout (NOK 0.55/share). On equity-return primitives it trades at 3.4x book and ~10.6x earnings — the high P/B is simply the arithmetic of a near-full-payout model that holds book equity at only ~NOK 1bn.

The right way to value it is on a normalized through-cycle ROE, not the peak: capital-markets revenue swings hard with deal and trading activity (the 2021 boom drove a ~72% ROE; the 2022-23 trough ~24%). On a normalized ~28% ROE and a higher 10.5% cost of equity (a cyclical broker warrants it), the Gordon fair value is ~NOK 7.3 — essentially the current price; on the near-peak 35% ROE it is ~NOK 9.3. So the stock is fairly valued for its normalized earnings and owned chiefly for the variable, high dividend. Near term, the January-2026 FIH Partners (Danish IB) acquisition added ~NOK 139m goodwill, took regulatory coverage from 1.8x to 1.5x and depressed Q1-2026 operating margin to ~8% on integration costs and seasonality.

Valuation · residual income (equity frame) & scenarios

Gordon fair P/B = (ROE-g)/(COE-g) with COE 10.5%, g 3%: a normalized ~28% ROE gives a fair value ~NOK 7.3 (~current); the near-peak 35% ROE supports ~NOK 9.3. Current 3.4x book, ~10.6x earnings, ~7.5% dividend yield.

Base NOK 7.3 (fair on normalized through-cycle earnings; the dividend is the return); bull NOK 9.3 if a strong capital-markets cycle sustains a mid-30s ROE; bear NOK 5.5 if activity troughs and the payout is cut.

Market-implied ROE
28.1%
sustainable ROE the price already demands — vs 32.9% observed
Current → Fair P/B
3.34× → 3.98×
at a sustained 32.9% ROE, Ke 10.5%, g 3%
Excess-return premium
NOK 7 / sh
value above NOK 2.20 book from the +22.4pp ROE−Ke spread

The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 28.1% vs 32.9% currently earned; at a sustained 32.9% ROE the warranted P/B is 3.98× (NOK 9/sh, +19%).

Scenario24m targetImpl. ROEUpsideProb.Driver
BullNOK 935%+27%30%Strong capital-markets cycle sustains a mid-30s ROE
BaseNOK 728%-1%45%Fair on normalized through-cycle earnings; dividend is the return
BearNOK 622%-25%25%Activity troughs; payout cut
Prob-weightedNOK 7+1%100%Scenario-weighted expected value

Sensitivity — fair value / share at Ke × ROE

Ke \ ROE10%14%18%22%26%30%34%
9.00%346781011
9.75%24567910
10.50% (base)2346789
11.25%2345678
12.00%2345678

Green = fair value above the current price of NOK 7.35. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.

Method & data. ROE 32.9% and book equity are observed (net income / total equity). Cost of equity 10.5% and terminal g 3% are assumptions, shown explicitly and overridable.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Capital-markets cycle

ECM/DCM/M&A activity drives fee income — the dominant swing factor.

2. High variable dividend

~7.5% yield at ~78% payout — the core reason to own it.

3. FIH Partners bolt-on

Adds Danish IB scale; integration is a near-term margin drag, a medium-term driver.

4. Capital-light + net cash

High ROE on a tiny equity base; no balance-sheet leverage risk.

Key risks
Conclusion

ABG Sundal Collier is a high-quality, capital-light Nordic investment bank earning a high but cyclical ROE and paying out nearly all of it (~7.5% yield) — but at 3.4x book it sits ~at a normalized-ROE Gordon fair value, so it is owned for the variable dividend, not a discount. HOLD; base NOK 7.3.

The swing factors are the capital-markets cycle and the FIH integration; accumulate on a cyclical pullback where the through-cycle ROE clears with margin.

Footnote evidence & sources

Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.

Adjustment / figureValueSourceWhy mttssn treats it this way
Total operating revenues FY20252,172Consolidated statement of comprehensive income p.48FY2025 total revenues NOK 2,172.066m, the sum of the three product lines; FY2024 1,932.799m (+12%).
Revenue split FY2025 (CF / M&A / Brokerage)736Consolidated statement of comprehensive income p.48Corporate Financing 736.455, M&A and Advisory 829.497, Brokerage and Research 606.114 — the three product lines on the income-statement face (the firm reports a single operating segment).
Operating profit FY2025491Consolidated statement of comprehensive income p.48FY2025 operating profit NOK 490.830m (FY2024 407.356m, +20%); operating margin 23%. LTM operating profit 465.9 = 34.4 + 490.8 - 59.3.
Net result / profit to owners FY2025364Consolidated statement of comprehensive income p.48FY2025 net result for the year 371.375m total group, of which 364.405m to owners of the parent and 6.970m to NCI. LTM net income to owners 356.3 = 39.7 + 364.4 - 47.8.
Total equity / equity to parent (Q1 2026)1,130Consolidated balance sheet p.14Latest-quarter equity snapshot is the invested-capital base: total equity 1,130.5m at 31 Mar 2026, of which 1,122.8m to owners of parent and 7.6m NCI (FY2025 total 1,053.4m).
Goodwill + other intangibles (FY2025)109Consolidated statement of financial position p.49Goodwill 93.308 + other intangibles 15.670 = 108.978 deducted from parent equity to reach tangible common equity 934.7 for ROTCE / P-TBV. (Total intangible ASSETS line 189.169 also includes 80.192 deferred tax assets, which are NOT deducted.)
Return on equity (5-year)0.35Key figures p.7Reported RoE (net result / average equity): 2025 35%, 2024 31%, 2023 24%, 2022 24%, 2021 72%. Highly cyclical; supports a normalized through-cycle approx 28% (ex-2021) for the Gordon anchor.
Proposed dividend per share FY20250.55Note 23 Equity / Statutory Director's ReportBoard proposed a payment to shareholders of NOK 0.55/share for accounting year 2025 (NOK 0.50 in 2024); total payment approx NOK 290m. approx 78% payout of basic EPS, approx 7.5% yield on NOK 7.35.
Payment per share (5-year history)0.55Key figures p.7Per-share payments 2021-2025: 1.00 / 0.50 / 0.50 / 0.50 / 0.55. Near-full payout of earnings each year — the high-distribution policy is central to the thesis.
EPS FY2025 (basic / diluted)0.71Note 22 Earnings per share p.64FY2025 basic EPS 0.71, diluted 0.66 (on profit to owners 364.405m; avg basic shares ex-own 512,612k, diluted 572,908k). Used for payout ratios.
Shares outstanding / treasury / diluted (Q1 2026)528Key figures in last nine quarters p.22Period-end shares outstanding 527,735k (constant), treasury 13,778k at Q1 2026 -> net 513,957k; diluted shares 584,625k (incl. 70,668k partner forward contracts). Net shares drive market cap and P/B.
Total operating revenues Q1 2026414Condensed consolidated income statement p.13Q1 2026 revenues 413.8m (Q1 2025 406.6m); CF 134.3 / M&A 110.3 / Brokerage 169.2. Operating profit only 34.4m (margin 8%) on FIH integration costs + seasonality.
Operating margin / ROE by quarter (cyclicality)0.08Key figures in last nine quarters p.22Operating margin ranged 8%-28% and annualised RoE 18%-42% over the last nine quarters — direct evidence of the cyclicality that mandates a normalized through-cycle ROE rather than a single year.
Regulatory capital ratio (Q1 2026)0.12Key figures in last nine quarters p.22Total capital adequacy ratio 12% at Q1 2026 (FY2025 14.1%), minimum-requirement coverage 1.5x — down after the FIH acquisition consumed surplus capital. A broker frame (no CET1 / credit-loss disclosure).
Year-end share price 20258.23Statutory Director's Report — ShareholdersABGSC share closed at NOK 8.23 on 31 Dec 2025 (NOK 7.08 on 31 Dec 2024); confirms the low single-digit nominal price. Live price NOK 7.35 (2026-06-08) used for current multiples.
Analysis history

How the mttssn view has evolved — each prior dated note is preserved.

Quality · Buffett tenets8 / 15
Understandable business
ABG Sundal Collier — leading Nordic investment bank / brokerage (ECM/DCM, M&A advisory, secondary brokerage); fee-driven, legible.
Durable moat
Low: strong Nordic franchise + relationships, but capital-markets revenue is highly cyclical with no durable pricing power.
Able & honest management
Shareholder-friendly near-full payout; the Jan-2026 FIH Partners acquisition is a sensible bolt-on but consumed surplus capital.
Financial strength
Capital-light and net-cash, but near-full payout leaves thin retained equity; regulatory coverage fell 1.8x -> 1.5x post-FIH.
Margin of safety
Limited: at 3.4x book / ~10.6x earnings it sits ~at a normalized-ROE Gordon fair value — owned for the variable ~7.5% yield, not a discount.