Arbuthnot Banking Share Discussion Threads

[luckymouse] 27/5/2016 09:04

woohoooo :)

[caradog] 27/5/2016 08:58

Arbuthnot will get the STB special dividend, but on a 20% rather than a 51.9% holding. What that means for the promised Arbuthnot special dividend is no longer clear. I was wondering why no announcement was made when the sale of EL was completed. Proceeds from the STB sale are being used for investment in ARBBs business so what, if any, special dividend is coming our way has not been made clear. It should be.

[spob] 27/5/2016 08:58

we will get some of that divi just a bit less now

[spob] 27/5/2016 08:57

Yes but the value of the STB stake is nowhere near reflected in the current ARBB share price

Remember that when STB goes ex dividend, the STB share price will fall by 1.65p anyway

[pyemckay] 27/5/2016 08:39

but we arent getting the special divi from sale of everyday loans.

[retsius] 27/5/2016 08:25

Spob
You must be grinning all day with that deal. Now priced at 16.10 to buy.
R.

[spob] 27/5/2016 08:19

I was surpised to be able to more than double my holding this morning at an offer price of just 1508p

[spob] 27/5/2016 08:03

Hidden value in STB is being realised

which is good news for ARBB shareholders

[topvest] 27/5/2016 07:50

Yes, all a bit odd though that we miss out on the Secure Trust special dividend. I would have thought the 10% discount was sufficient for the new investors, but no...they get a 165p dividend as well. On balance, I'm a bit disappointed. This is the value event we were all looking for, but i would have preferred a dividend en specie of the entire Secure Trust holding rather than the shares being sold at a discount. Nevertheless, I'm happy to keep following Henry Angest.

[spob] 27/5/2016 07:38

ARBB is selling a big chunk of STB (discount 10%)

[glasshalfull] 11/5/2016 16:51

...or alternatively register with Edison and read the note for FREE!



Regards,
GHF

[thomasthetank1] 11/5/2016 14:23

Read Edison's note on ARBUTHNOT BANKING GROUP PLC (ARBB), out this morning, by visiting hxxps://www.research-tree.com/company/GB0007922338

"With its long-term track record, Arbuthnot Banking Group (ARBB) places great emphasis on stability and experience and has also been adroit in taking opportunities that emerged in the post-financial crisis environment. The acquisition and recent sale of Everyday Loans Group has provided scope for additional organic loan growth at both Arbuthnot Latham and 51.9%-owned Secure Trust Bank (STB). While near-term returns on equity will be diluted by excess capital, successful development of loan books should underpin a stronger val..."

[davebowler] 10/5/2016 14:06

Edison;
2015 results
The group reported a pre-tax profit of £34.2m (£37.7m on an underlying basis), including Everyday Loans Group (ELG), an increase of 52%. Both the retail and private banks (Secure Trust and Arbuthnot Latham respectively) have made good progress (see pages 2-4). The sale of ELG was completed in April 2016 and is expected to generate a net profit of about £115m. Reflecting this, a special dividend of 25p is expected to be paid to ARBB shareholders.
Outlook
The main prospective driver for STB is the opportunity to continue to expand its loan books rapidly, further increasing diversification and the emphasis on asset-backed lending. The fact that it still has relatively small market shares in the areas it is addressing suggests good potential for profitable growth. At Arbuthnot Latham continued healthy growth in the client base, assets under management and the development of a commercial bank to serve entrepreneurial clients and SMEs are positive drivers for future income. On a more cautious note there are risks in the macro environment in the UK with the EU membership referendum a near-term source of uncertainty together with downward trend in UK (and global) GDP growth estimates. In the event of a sharp market correction, however, the group could be afforded the chance to make an opportunistic acquisition.
Valuation: Upside as surplus capital employed
Comparing ARBB with a broad peer group of challenger banks, specialist lenders and wealth managers appears to place it broadly in the pack in terms of price to book valuation. However, our ROE/COE and sum-of-the-parts valuations point to a value of about 1,670p, indicating 11% upside from the current level (page 8).

[retsius] 08/5/2016 08:15

Pvb
Yes that's what I thought.
Advfn is incorrect on this one.
R.

[pvb] 07/5/2016 19:53

Do we get the special divvy on Friday as under 'financials?'

There has as yet been no announcement of the special dividend.

13th May is the final dividend for the financial year.

[retsius] 07/5/2016 18:45

cnx

Yes ,see that under `Financials`in STB on ADFVN.
Might e-mail co.on Monday to clarify the pay-out.

R.

[cnx] 07/5/2016 18:14

advfn shows arbb dividends payable 13 may

[rik shaw] 07/5/2016 17:38

For STB I have only received the basic dividend not the special so far.

[retsius] 07/5/2016 16:56

Do we get the special divvy on Friday as under '
financials?'
Can't seem to see any mention of it anywhere else.

[retsius] 05/5/2016 20:28

GHF

Brilliant summary and info.
At last ,I am breaking even and will top up.
`British Bulls `today says `Buy`

R.

[glasshalfull] 05/5/2016 19:02

Positive AGM statement today from ARBB today,

"The Group has had a good start to the year with overall lending volumes higher than last year and at the end of the first quarter, customer loan balances have increased by more than 30% compared to the prior year.
 
"The completion of the sale of Everyday Loans on 13 April 2016 has generated a substantial profit which has further strengthened the Group's capital and liquidity resources.
 
"The Group will continue to invest these resources in its on-going businesses and we remain confident of making good progress during the remainder of the year."



Also strong statement from its 51.9% owned subsidiary STB yesterday, which concluded,

"The Bank continues to work on a diverse pipeline of business development opportunities. With very strong capital and funding positions we believe we are well positioned to make further positive progress during the year."



---

IMHO ARBB still look a great risk/reward play & valued at a considerable discount to its 51.9% held subsidiary.

Quick calcs:-

ARBB market cap
Shares in issue 14.889m
Mid Price £15.30
= £227.8m

STB market cap
Shares in issue 18.192m
Mid Price £28.12
= £511.6m

ARBB shareholding in STB
9,444,538 (51.92%)
=£265.6m

While the valuation discrepancy between ARBB & STB has narrowed recently, ARBB's stake in STB is still worth 17% more than its own market capitalisation, therefore attributing a nil valuation to its Private Banking arm which is growing strongly!

This is best articulated via Simon Thomson's coverage in IC, who continues to recommend ARBB a buy & provided an update in a March issue

In the article he concluded,

"...remain positive on Arbuthnot's shares. That's not only because its £200m market capitalisation is well below the £268m open market value of its holding in Secure Trust, despite the fact that Arbuthnot has been able to sell shares easily in Secure Trust, but also because the company is generating decent growth on its own.

For instance, private bank Arbuthnot Latham increased profits by two thirds to £6m in 2015, a performance that reflects a substantial increase in new clients opening accounts, an improved outcome from its Dubai office, a contribution from the Dunfermline Building Society residential mortgage book, acquired from its administrators in December 2014, and the benefits of hiring more private bankers.

Arbuthnot Latham is well funded and a loans-to-deposit ratio of 69 per cent suggests there is ample funding available to continue to grow lending here. The bottom line is that the private bank is in the price for free.

There are income attractions too. In fact, with Arbuthnot set to receive a £22m dividend from Secure Trust on its 9.48m shareholding in that company, its board have declared total dividends of 54p a share including a special of 25p a share. Also, its pro-forma net tangible assets will rise to £220m as soon as the Everyday Loans sale completes which means that the company's equity is trading on a 10 per cent discount to tangible book value.

The shares are also trading on only 10 times earnings estimates of 130p according to analyst James Hamilton at broking house Numis Securities."

---

Regards,
GHF

[retsius] 05/5/2016 10:13

Anyone going to the AGM today?
Will wait for a statement later.
R.

[luckymouse] 03/5/2016 16:18

strong fwds = calculated fwd fair values for FY1 & FY2 (lot higher)
low net assets = high ENA (EPS/NA) = high earnings power to weight ratio - v agile
(total opposite of someone who builds power stations for instance)

[skyship] 19/4/2016 19:14

Sorry LM - nor did I - can you be more explicit?

Do agree with the surprise on the upside however...

[retsius] 19/4/2016 16:41

LuckyMouse
Did not understand your comment?
R.
Brilliant rise today.