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ABBEY MORTGAGE BANK PLC (ABBEYBDS)
Quarter Under Preview: 12MONTHS Unaudited 2025
Current Share Price: N10.30
Price At Released: N9.40
Latest Final Dividend: N0.06
Latest Interim Dividend:
Estimated Beta Value: 0.38x
Estimated Intrinsic Value: N1.37
Rating: Hold
Analyst: Jeariogbe Tunde Segun The Bank, which was incorporated in Nigeria as a private limited liability company on 26 August 1991, obtained its license to operate as a Mortgage Bank on 20 January 1992, commenced business on 11 March 1992 and later converted to a public limited liability company in September 2007.
On 21 October 2008, the Bank became officially listed on the Nigerian Stock Exchange. Following the approval of the Central Bank of Nigeria, the Bank changed its name from Abbey Building Society Plc to Abbey Mortgage Bank Plc on 16 January 2014.
The company focus on helping individuals and business with housing finance and mortgage products. Over the years, it has expanded into broader retail and investment banking.
Today, the bank offers a wide range of services, including; Mortgage loans, savings, current, and fixed deposit accounts, digital banking services, financial advisory services, and retail and investment banking products.
Abbey bank also specialized in loans, including financing for women-owned real estate ventures.
Released Numbers (Unaudited 2025 Full Year Performance)
By records, the bank is expected to release its audited full year performance indices towards the end of March.
Nevertheless, we have compared the unaudited numbers released on the first month of the year with the full year figures of the corresponding year.
Thus, in the released indices, it reported a N20.016 billion Gross Earnings against N12.433 billion in the corresponding year.
Interest Income stood at N18.976 billion compared to the N11.954 billion announced in 20024 full year business session. Interest Expenses is N13.914 billion versus N8.557 billion, thus, Net Interest Income is estimated at N5.061 billion versus N3.396 billion estimate of 2024.
Operating Expenses through the business session was valued at N2.760 billion, a 17.79% increase from the previous N2.343 billion, Profit before Tax stood at N3.060 billion higher than the N1.228 billion achieved in the previous year.
Total Tax Expenses reported is N180.59 million slightly above the N160.75 million of last year, thus, Profit for the year is estimated at N2.880 billion versus N1.068 billion.
See the below table for details.
At the end of the 2025 business session, the Total Assets of Abbey Mortgage Bank is valued at N165.570 billion, this is a 96.52% growth over the N84.251 billion estimated in 2024.
Total Liabilities on the other hand is N154.067 billion against N75.019 billion, Net Assets estimate stood at N11.502 billion higher than the N9.231 billion in the corresponding year.
Retained Earnings improved by a whopping 165.30% to stand at N2.991 billion from N1.127 billion. Total Deposits received is N89.555 billion Versus N64.865 billion, while Total Loans and Advances through the financial year is N81.449 billion from N26.100 billion. See the table above for details.
Financial Strength/Solvency Ratios
- Debt Ratio: The Debt ratio shows the percentage of total assets financed by liabilities. At 93.05%, the bank is highly leveraged, meaning the bulk of its assets are funded by debt (which is typical for banks due to deposits being classified as liabilities). However, the increase from 89.04% to 93.05% suggests, higher reliance on borrowed funds and customer deposits, increased financial leverage, it also shows a slightly higher solvency risk compared to 2024. Please understand that, for a Mortgage bank, high leverage is normal, but the upward movement should be monitored carefully.
- Total Debt to Equity Ratio: The change seen in this ratio is a significant jump. For every N1 of equity in 2025, the bank carries N13.39 in debt compared to N8.13 in 2024. This is a very sharp increase in leverage. The implications are; aggressive assets exploitation, equity growth did not keep pace with debt growth, it also shows higher sensitivity to interest rate or asset quality shocks. This level of increase of almost 65% is material and suggests 2025 expansion was heavily debt-driven.
- Equity Ratio: The equity ratio shows a drop of 36.60%, this confirms what we saw earlier. The equity ratio shows a percentage of assets financed by shareholders’ funds, thus, a drop from 10’96% to 6.95% means; the capital buffer has thinned, shareholders’ cushion against losses has reduced, and financial flexibility has weakened. This is the most concerning movement within the solvency group.
- Beta Value: A beta value of 0.38x suggests; low volatility relative to the market, the stock moves less aggressively than the overall market. Investors may see it as relatively defensive move. However, low beta does not eliminate balance sheet risk, it only reflects market price behavior.
Overall Financial Strength Verdict: The ratios shows strong asset base growth, which was funded primarily through increased leverage, it shows that capital buffer weakened significantly, and risk profile increased year-on-year.
As noted above, for a mortgage bank, high leverage is normal, but the speed of leverage expansion in 2025 is the key concern.
Profitability Ratios
- EBITDA Margin: An EBITDA Margin of 85.98% is very high, which is typical of financial institutions, since operating cost structures differ from manufacturing firms. The increase suggests; strong revenue growth relative to operating costs, good cost discipline, and improved operating efficiency. Please understand that, this is a positive signal.
- Pre-Tax Margin: This is another major improvement, the bank significantly improved its profitability before tax, a 54% jump indicates; high interest income or improved asset yields, better spread management, and possibly improved non-interest income.
This also suggests that 2025 expansion translated into stronger earnings, which partly explains the aggressive leverage we saw earlier.
- Interest Expense to Gross Earnings Ratio: Interest cost remains high and slightly increased. This aligns with the sharp rise in leverage. The bank is; funding growth through deposits and borrowings, and paying more in funding costs. Though the increase is marginal, at nearly 70%, interest expense consumes a large portion of earnings. Yes, it’s typical of banks, efficiency of funding mix remains critical.
- Return on Average Equity: The over 100% change is very strong, ROAE is more than doubled, however, we must interpret carefully, since equity ratio fell significantly, the thinner capital base mechanically boosts ROE. So, we can say, the strong ROE is partly genuine profit growth, but amplified by higher leverage. Please understand that, high ROE with falling equity ratio confirms leverage-driven profitability expansion.
- Return on Average Assets: This is a cleaner profitability indicator since it is less distorted by leverage. The improvement from 1.27% to 1.74% suggests; better asset yield, improved operational efficiency, and strong core profitability.
This confirms that earnings growth was not purely leverage driven, operational performance also improved, though slightly.
Overall Profitability Verdict: 2025 shows a very strong profitability rebound, and the aggressive balance sheet expansion appears to have translated into higher earnings.
However, the quality of earnings depends on; sustainability of low tax rate, stability of funding costs, and asset quality.
Efficiency Ratios
- Operating Expenses to Gross Earnings: This ratio shows a drop of 26.83% and in our opinion, it is a strong improvement.
The bank reduced operating cost intensity significantly this indicates; better cost control, improved operational leverage, and revenue growth outpacing cost growth. This aligns with the improved EBITDA margin we analyze earlier.
- Gross Earnings to Total Assets: This ratio declined by 18.08%, and it means that asset productivity slightly weakened, the bank generated less income per naira of assets in 2025 compared to 2024. Possible reasons include; rapid asset growth (that is; denominator expands faster than income), lower yield assets added to balance sheet, and more liquidity or conservative asset allocation.
This ties back to the aggressive leverage expansion. Assets grew quickly, but earnings yield did not scale proportionately. We recommend that this is something for the management to monitor.
- Loan-to-Deposit Ratio: The increase of +126.03% is a dramatic shift, in 2024 the bank was conservative, only about 40% of deposit were deployed as loans, but in 2025, deposits are now actively deployed asset utilization improved significantly, and the bank is taking more credit exposure.
In our opinion, A Loan-to-Deposit ratio of around 90% is aggressive, but not extreme for a mortgage focused bank, however, the speed of increase is quite significant.
Overall Efficiency Verdict: The efficiency picture shows that 2025 was an expansion year; higher deployment of funds was achieved, improved cost management was done, plus strong operational leverage.
On the other hand, it is important to point out the higher balance sheet risk, and the more aggressive loan book positioning.
Investment Ratios
- Earnings Per Share: The increase of +169.64% is a massive improvement. EPS almost tripled, reflecting; strong net profit growth, and higher profitability, translating to shareholders. On the negative side, this is supported by thinner equity base leverage effect. 2. P/E-Ratio: The ratio declined, suggesting that; earnings grew faster than share price, however, 33xP/E is still very high for a mortgage bank in Nigeria. It implies; market is pricing the stock in future growth, or the stock price is stretched relative to fundamentals.
- Earnings Yield: Earnings yield improved but remain low. At 3.02%, investors are earning roughly 3% on current earnings.
This is relatively modest, compared to fixed income alternatives in Nigeria. This suggests valuation is still premium, and market expectations are extremely high.
- Book Value per Share: As shown in the below table, Book Value increased positively.
This means that, retained earnings improved, and shareholders equity grew in absolute terms. But the same grew slower than liabilities as earlier shown in equity ratio decline.
Overall Conclusion:
2025 was clearly an aggressive expansion and profitability year for Abbey Mortgage Bank. The bank leveraged up significantly, deployed deposits aggressively, improved margins, and delivered strong EPS growth. However, capital adequacy weakened, risk profile increased, and valuation is premium and leaves little margin for error.
In our opinion, if 2026 delivers sustained earnings growth without further weakening capital ratios, valuation may be justified. But if asset quality deteriorates or earnings normalize, downside risk exists.
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