The fall in headline half-year profits at Arbuthnot Banking (ARBB) reflected an exceptional prior year gain at Secure Trust Bank (STB) - in which Arbuthnot has a 70.7 per cent stake. Adjust for that, as well as share option scheme costs, and group underlying profit actually rose 64 per cent year on year to £7.2m.
As well as the contribution for its stake in Secure Trust Bank, Arbuthnot has its own private banking operation and pre-tax profit there fell from £1.4m to £1m. That was mainly down to hiring more qualified senior bankers to handle the increase in business, as well as the opening of a wealth management advisory service in Dubai. Customer loans grew from £283m to £307m, while customer deposits rose from £406m to £453m. Significantly, a number of higher-yielding retail deposits have now matured and are being replaced with less expensive deposits. Add that to a successful application to join the funding for lending scheme and the group's finance costs are expected to fall in the second half. On the advisory side, discretionary assets under management grew 28 per cent to £430m, while the structured products operation - Gilliat Financial Solutions - increased its sales volume by 25 per cent to £74m.
Broker Numis Securities full-year adjusted pre-tax profit of £11.2m, giving EPS of 32.2p (from £12.5m and 52.6p in 2012).
| ARBUTHNOT BANKING (ARBB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 955p | MARKET VALUE: | £142m | |
| TOUCH: | 925-955p | 12-MONTH HIGH: | 955p | LOW: 507p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 562 | |
| NET ASSET VALUE: | 337p* | |||
| Half-year to 30 Jun | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2012 | 10.8 | 50.9 | 11.0 |
| 2013 | 2.04 | nil | 11.0 |
| % change | -81 | -100 | - |
Ex-div: 4 Sep Payment: 4 Oct *Includes intangible assets of £14m, or 94p a share | |||
