Arbuthnot Banking (ARBB) continued to diversify its lending streams by growing its commercial banking operations last year. Asset-based finance specialist Renaissance grew its lending balances by a fifth, while the specialist finance business – which provides short-term loans to professional property investors – had its first customer loan approved in February this year.
However, private banking balances reduced by 1 per cent as management pulled back from writing new business in an increasingly competitive prime lending market, instead choosing to extend existing loans that fit the lender’s returns criteria. With that in mind, the management structure has been reorganised and the focus has shifted towards wealth management activities.
The commercial bank has also applied to take part in Royal Bank of Scotland’s (RBS) remedies process, to receive a grant from the Capabilities and Innovation Fund. Any funds gained would be used to open another office in the south-east of England, broaden product lines and develop its Oracle banking platform.
Analysts at Numis expect net tangible assets of 1,264p a share at the year-end, up from 1,205p in 2018.
| ARBUTHNOT BANKING (ARBB) | ||||
| ORD PRICE: | 1,300p | MARKET VALUE: | £194m | |
| TOUCH: | 1,300-1,330p | 12-MONTH HIGH: | 1,650p | LOW: 1,040p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 1,315p | LEVERAGE: | 12 | |
| Year to 31 Dec | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 92.0 | 13.9 | 32.4 | 27 |
| 2015 | 34.6 | -2.6 | -16.9 | 29 |
| 2016 | 41.5 | 0.2 | -3.7 | 31 |
| 2017 | 54.6 | 2.5 | 14.0 | 33 |
| 2018 | 67.9 | 6.8 | 38.0 | 35 |
| % change | +24 | +172 | +171 | +6 |
| Ex-div: | 25 Apr | |||
| Payment: | 17 May |
