Arbuthnot Banking (ARBB) came good on its strategy to diversify its private banking business, following the sale of a chunk of its Secure Trust (STB) holdings last year. The group made two acquisitions, along with purchasing a £53m long leasehold on a West End office building, intended as a future base for its private bankers to meet clients. Management also got to work developing the commercial banking operations. Loans written in the period increased by more than a third to £227m.
The private banking loan book grew by 10 per cent to a total of £683m. The commercial banking business, only launched in September 2015, had lending balances of £76m by the year-end and 31 staff, plus new offices opened in Exeter and Manchester. This segment lends mainly to owner-managed companies operating in the media and real estate sectors, and has a specialist team addressing healthcare, legal services and private education.
Management put some of the cash proceeds from the Secure Trust Bank sale to use, acquiring the loan book of private bank Duncan Lawrie and agreeing the purchase of vintage car specialist Renaissance Asset Finance. Chief operating officer Andrew Salmon said further bolt-on acquisitions are planned but the bank "never really wants to bet the farm".
Analysts at Numis expect net tangible assets of 1,523p at the end of December 2017, from 1,534p a year earlier.
ARBUTHNOT BANKING GROUP (ARBB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,468p | MARKET VALUE: | £219m | |
| TOUCH: | 1,425-1,477p | 12-MONTH HIGH: | 1,598p | LOW: 1.048p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | na | |
| NET ASSET VALUE: | 1,573p | LEVERAGE: | 5.6 | |
| Year to 31 Dec | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 65.6 | 12.6 | 52.6 | 25 |
| 2013 | 100 | 15.7 | 51.9 | 26 |
| 2014 | 92.0 | 13.9 | 32.4 | 27 |
| 2015 (restated) | 34.6 | -2.6 | -16.9 | 29 |
| 2016 | 41.5 | 0.2 | -3.7 | 31 |
| % change | +20 | - | - | +7 |
Ex-div: 13 Apr Payment: 12 May *Excludes special dividends of 300p and 25p a share paid in 2016 | ||||
