Arbuthnot Banking (ARBB) is building up its capital levels to fund further lending growth, this month agreeing to purchase a £266m portfolio of residential mortgages. The alternative lender raised £40m of regulatory capital by selling 37 per cent of its remaining holding in Secure Trust (STB), issuing some non-voting shares on the NEX Exchange Growth Market, along with £25m of subordinated tier two debt to Swedish debt fund Proventus.
The commercial banking business continued to lead the way in terms of lending growth, as the loan book rose more than a third. A 42 per cent rise in commercial deposits also helped further diversify funding sources. Refocusing on that business meant the private banking loan portfolio shrunk by 2 per cent as new lending fell a third.
What’s more, increased competition within certain asset finance markets meant Renaissance’s profitability declined, despite the loan book rising more than a quarter.
Analysts at Numis expect adjusted net tangible assets of 1,264p a share at the December 2019 year-end, up from 1,205p last year.
| ARBUTHNOT BANKING (ARBB) | ||||
| ORD PRICE: | 1,390p | MARKET VALUE: | £ 207m | |
| TOUCH: | 1,320-1,400p | 12-MONTH HIGH: | 1,650p | LOW: 1,040p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 42 | |
| NET ASSET VALUE: | 1,368p | LEVERAGE: | 12.3 | |
| Half-year to 30 Jun | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 31.4 | 1.2 | 21.7 | 15 |
| 2019 | 35.6 | 2.9 | 16.6 | 16 |
| % change | +13 | +142 | -24 | +7 |
| Ex-div: | 25 Jul | |||
| Payment: | 16 Aug |
