Management at Arbuthnot Banking (ARBB) has been approached with plenty of ideas for its next strategic step, according to chief operating officer Andrew Salmon. After gaining £100m in net proceeds from its sale of more than half its stake in Secure Trust Bank (STB), the challenger bank has a lot more capital to play with. Acquisitions can be expected in the future, but for the next year management intends to continue growing its Arbuthnot Latham private and commercial banking businesses.
Arbuthnot Latham grew its pre-tax profit by a fifth to £4.5m, while customer assets grew 14 per cent to £657m. Investment in commercial banking was focused on growing staff numbers in London, and offices in the north and south-west of England are soon to follow. The bank has bought a west London property for £50.2m plus associated costs, which should initially generate around £1.8m in rental income, with plans for a client office further down the line.
Secure Trust is now classed as an associate company, accounted for under discontinued operations. Along with £2.3m in remuneration costs associated with the deal, this resulted in a statutory pre-tax loss during the first half. Analysts at Numis are reviewing their forecasts.
ARBUTHNOT BANKING (ARBB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,480p | MARKET VALUE: | £221m | |
| TOUCH: | 1,426-1,480p | 12-MONTH HIGH: | 1,621p | 1,243p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 1 | |
| NET ASSET VALUE: | 1,892p | LEVERAGE: | 4.6 | |
| Half-year to 30 Jun | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 16.8 | -0.4 | 44 | 12 |
| 2016 | 19.2 | -2.4 | 1,111 | 13* |
| % change | +14 | - | - | +8 |
Ex-div: 1 Sep Payment: 30 Sep *Excludes 25p special dividend to be paid on 27 Jul | ||||
