Financial Results

Arbuthnot Profits Soar In 2023

Amanda Cheesley Deputy Editor London 19 July 2023

Arbuthnot Profits Soar In 2023

London-based Arbuthnot Banking Group, the holding company for Arbuthnot Latham, releases its unaudited results for the first six months of 2023.

Arbuthnot Banking Group has announced this week that profit before tax climbed to £26.4 million ($34.5 million) in the first six months of 2023, surging from the £3.4 million it recorded the same time last year.

According to the firm, underlying profit before tax reached £29.3 million, compared with £10.7 million the same time last year. On the back of this, it raised its interim dividend to 19 pence per share, compared with 17p per share in June 2022.

There was a Common Equity Tier 1 capital ratio of 12.2 per cent, compared with 11.4 per cent the same time last year, the bank said, whilst the total capital ratio was 14.5 per cent, compared with 14 per cent in June 2022. Earnings per share reached 129.4 pence whilst net assets per share were 1470 pence.  

Customer loans (including leased assets) reached £2.3 billion, increasing by 2 per cent in the first half of the year, and 7 per cent year-on-year, in spite of a tighter credit appetite, the bank continued.

Customer deposits were £3.3 billion, a 5 per cent increase since the year end and a 16 per cent increase year-on-year. Assets under management reached £1.4 billion, a 4 per cent increase against 31 December 2022 and an increase of 6 per cent year-on-year, driven by net inflows in the period, the bank added.

The group said it continues to benefit from the business model it has established over many years, whereby the return to a more normalised Bank of England base rate brings increased revenue on both its lending and excess liquidity, which has contributed, alongside the execution of the group's strategy, to a significant increase in profitability.

Interest rates paid on client deposits have been increased to reflect base rate increases, the bank continued. As previously guided, the total cost of funding is expected to increase in the second half of 2023 due to cheaper maturing deposits being replaced with deposits at higher rates.

Whilst the outlook for the economy looks increasingly uncertain and Arbuthnot said it remains alert to potential increases in credit risk, the improved profitability, and robust financial strength, means that the group remains well positioned.

"The group made good progress in the first half of the year, with a substantial increase in profitability as the business model we have invested in over many years, focused on relationship-based banking and diversified lending to higher margin specialist sectors, continues to deliver for the group," Sir Henry Angest, chairman and chief executive of Arbuthnot, said. 

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