Arbuthnot Banking Share Discussion Threads

[pvb] 29/10/2024 16:57

A bit late here!



Arbuthnot Banking Group PLC Third Quarter 2024 Trading Update
17/10/2024 7:00am

Highlights

· Customer deposit balances of £3.8bn at the period end (30 September 2023: £3.5bn)
· Customer loans (including leased assets) of £2.5bn at the period end (30 September 2023: £2.3bn)
· Funds under Management and Administration exceed £2bn for the first time with growth of 18% in the first nine months of 2024
· Completed London office move to newly refurbished premises in the heart of the City

(They always seem to be moving HQ...)

[davebowler] 21/10/2024 10:33

hTTps://www.insidermedia.com/blogs/north-west/Arbuthnot-Commercial-ABL-backs-Beltline-Capitals-acquisition-of-Expert-Packaging?utm_source=liverpool_newsletter&utm_

[davebowler] 17/10/2024 11:42

Shore Capital research-

Summary: Arbuthnot (ARBB) has issued a cautiously positive trading update for the three months to 30 September 2024. The update reports: (i) further diversification of the loan book towards the higher-yielding Specialist Lending Divisions where overall growth remained strong in Q3; (ii) strong Wealth Management growth where AuM is now c.£2bn; (iii) a negative impact to NIM and revenue following the start of the interest rate cutting cycle as the company had previously signalled. Despite persisting economic headwinds, credit performance has remained robust reflecting conservative underwriting and low LTV lending, whilst the core Banking loan book is expected to contract towards the end of FY24F as ARBB leans into more capital efficient avenues for growth. Following recent publication by the PRA of a consultation paper around Basel 3.1, potential changes to the regulatory capital regime are not yet clear and may ultimately influence how ARBB evolves capital allocation across the Specialist Lending Divisions. In anticipation of the upcoming Budget, the breadth of ARBB’s business should ensure a nimble and proactive response to changes in the UK fiscal regime and potential opportunities that may arise. We will update our forecasts shortly to reflect the impact of H2 FY24F reductions in interest rates. HOUSE STOCK. Detail:  Customer loans (incl. Asset Alliance lease assets) have increased YTD from £2.3bn to £2.5bn, of which £1.6bn apply to core Banking and £0.9bn to the Specialist divisions..  Customer deposits are broadly flat YTD at £3.8bn, reflecting a significant funding excess with loan/deposits at around two-thirds.  Wealth Management AuM is +18% YTD with a significant proportion of inflows generated by internalising customer deposits.  Funding costs ended the period at around 3.1% with the majority of fixed-term deposits having repriced following the rise since 2022 in interest rates.  Renaissance Asset Finance loans reached £242m, +23% YTD as the offering has broadened to include block discounting and revolving credit facilities.  Asset-based Lending loan book grew to £293m, +22% YTD as the franchise has concentrated on existing customers whilst midmarket deal making has remained subdued.  Asset Alliance’s lease assets ended the period at £362m, +11% YTD and flat since end-June as macro uncertainty and improvement in the supply of new vehicles has weighed on demand for used trucks, whilst ARBB has focused on maximising yields.  Having now moved into new City offices, keys to the previous offices will be returned in October, ending the associated dual-running costs incurred during the office transition. Valuation: We view ARBB’s valuation as undemanding for a sustainable low/mid-teens RoTE, and an estimated 7% compound TNAV growth from FY23A-26F, trading on a trailing P/TNAV of <0.7x (TNAV at 30 June 1396p). For the year ending December 2025, dividend yield of 5.8% is striking against P/E of c.5x. Our prevailing fair value of 1675p suggests significant upside

[petewy] 17/10/2024 08:30

Healthy update

[pvb] 02/8/2024 22:17

Seemed to survive today better than most. But what will next week bring?

[davebowler] 30/7/2024 12:01

Our multiple approaches see a broad range of valuations: £13.85 DDM, £22.69 SOTP and £23.35 GGM. The average is £19.98, nearly double the current share price. Trading at 62% of NAV is anomalous, in our view, with above the cost of capital returns (target mid-teens pre-tax ROCE) and given ABG’s growth potential. ► Risks: Margins may have peaked now, with the trend, and level, of interest rates a key driver to earnings. A higher-for-longer outlook would assist earnings. Credit is a risk, but ABG is conservative in lending, taking good security; so, its loss, given default, is low. Other risks: reputation, regulation and compliance. ► Investment summary: ABG offers strong-franchise and continuing-business (normalised) profit growth. Its balance sheet strength gives it a number of wideranging options to develop organic and inorganic opportunities. The latter are likely to increase in uncertain times. Management has been innovative, but also very conservative, in managing risk. Having a profitable, well-funded, well-capitalised and strongly growing bank priced below book value is an anomaly, in our view.

[pvb] 23/7/2024 16:56

23 July 2024

ARBUTHNOT BANKING GROUP PLC ("Arbuthnot", "the Company", "the Group" or "ABG")

Unaudited results for the six months to 30 June 2024

Arbuthnot Banking Group PLC today announces a half yearly profit before tax of £20.8m.

FINANCIAL HIGHLIGHTS

● Profit before tax of £20.8m for the six months to 30 June 2024 (30 June 2023: £26.4m), as expected, as existing fixed rate deposits have continued to reprice onto higher terms as they are renewed.

● Underlying profit before tax of £20.8m (30 June 2023: £29.3m)*.

● Earnings per share of 94.6p (30 June 2023: 129.4p; 31 December 2023: 222.8p).

● CET1 capital ratio of 11.6% (30 June 2023: 12.2%; 31 December 2023: 13.0%) and total capital ratio of 13.6% (30 June 2023: 14.5%; 31 December 2023: 15.2%).

● Interim dividend of 20p per share previously announced and already paid in June (30 June 2023: 19p per share).

● Special dividend of 20p per share previously announced and already paid in June.

● Net assets per share at 30 June 2024 of £15.75 (30 June 2023: £14.70; 31 December 2023: £15.47).

[petewy] 23/7/2024 08:35

Cheerful update but profit drop.

[pvb] 30/5/2024 15:27

30 May 2024

Arbuthnot Banking Group PLC

Notification of Special and Interim Dividends

The Board of Arbuthnot Banking Group PLC ("Arbuthnot" or the "Group") is today pleased to announce that, following the recent strong performance of the Group, it has approved the distribution to shareholders of a special dividend of 20p per Ordinary Share and Ordinary Non-Voting Share.

The Board has also determined to pay its interim dividend for the year ending 31 December 2024 at the same time and, given its confidence in the prospects of the Group, to increase the interim dividend to 20p, being an increase of 1p over the interim dividend paid in 2023.

The two dividends totalling 40p per Ordinary Share and Ordinary Non-Voting Share will be paid on 20 June 2024 to shareholders on the register on 7 June 2024. The ex-dividend date is 6 June 2024.

[davebowler] 29/4/2024 10:57

Shore Capital-

Profitability to normalise in FY24F
Arbuthnot (ARBB) has continued to demonstrate the strength of its commercial and private banking franchise as an engine to accumulate low-cost deposits, funding high-yield asset growth via the specialist lending subsidiaries. Over the past two years, rising interest rates have driven a steep NIM-led upgrade cycle. Assuming the tightening cycle has peaked, we expect “supernormal&#8221; FY23A RoTE of nearly 18% to moderate to a “cruising altitude” of 12-13% as the gap between deposit and interest rates narrows. Elevated real estate costs impact in FY24F before moderating in FY25F, while we see ARBB’s office upgrade as a confident move to accommodate further expansion of the business. HOUSE STOCK. Interest rate impact to earnings: The increase in rates over the past couple of years sharply accelerated ARBB’s profitability improvement, allowing the company to generate higher income on assets and surplus funding. This drove a steep upgrade cycle with FY23A RoTE of 17.6% and pre-tax profit of £47.1m comparing to our estimates two years ago respectively of c.7% and c.£15m. Our model assumes no future change in interest rates, so the normalisation in profitability from a “supernormal&#8221; level in FY23A principally reflects NIM (net interest margin) compression assuming deposits continue to reprice upwards. If base interest rates reduce: (i) liquid assets will reprice immediately lower, noting the significant amount of excess liquidity ARBB currently holds; (ii) fixed-rate lending within the growing specialist lending subsidiaries should partially mitigate pressure on overall asset yields; (iii) realising associated funding cost reductions will take time. ARBB’s share price and P/TNAV valuation have barely moved over the last two years of upgrades, so, in our view, the valuation ought to hold relatively firm when interest rates reduce. Funding & NIM: ARBB’s deposit franchise and low cost of funding are key differentiating factors vs. other smaller UK bank peers. FY23A funding costs were meaningfully lower despite more deposit growth than we had estimated. £3.8bn of deposits at end-2023 reflected a very prudent loan/deposit ratio of 62%. Funding costs averaged 2.4% during FY23A and exited the year at 3.2%, which we now assume has peaked. NIM compression from 6.0% in FY23A to 5.5% in FY24F and 5.3% in FY25F accommodates some caution on asset yields. Forecast changes post FY23A results on 28 March: EPS in FY24F -14% to 167p, FY25F -7% to 189p. EPS reductions principally reflect operating expenses as we factor in: (i) higher real estate costs for ARBB’s office upgrade including the cost of running two premises during FY24F; (ii) continued investment in the digital platform. DPS forecasts are unchanged, FY24F at 50p and FY25F at 54p. Investment case & valuation: ARBB’s valuation is undemanding for a sustainable low/mid-teens RoTE and an estimated 8% compound TNAV growth from FY23A-26F, trading on a trailing P/TNAV of 0.8x, FY24F dividend yield of 4.7% and P/E of 6.4x. Balance sheet strength reflects capital and liquidity surpluses, noting the stock’s robust performance since the Apr 2023 fundraise. Our fair value estimate rises to 1675p (from 1640p) as we roll forward our valuation model.

[pvb] 28/3/2024 18:24

"Guess I should attend the AGM"

Guess you should! ;-)

[petewy] 28/3/2024 18:19

Please, those qustions neecd answering

[makinbuks] 28/3/2024 17:17

Yes all seems good at Group level, and as always BV of 1547p is eye wateringly higher than the share price

However, reading on. Wealth Management loses £4m on income of £11m both this year and last (broadly) Why continue this activity?

Similarly Bus and truck finance loses £3.2m on revenue of £100m considerably worse than prior year despite a positive comparison on provisions

And what on earth happens in Other Divisions? How do you turn a profit of £11m into a loss of £5m? Apparently the top line falls £10m while OPEX is up £7m!!!!! I accept a one off write down of property £2.8m as part of the OPEX story

Guess I should attend the AGM

[pvb] 28/3/2024 15:31

A good set of results today:



FINANCIAL HIGHLIGHTS

Profit Before Tax of £47.1m (2022: £20.0m), an increase of 135%

· Operating income increased to £178.9m (2022: £137.4m)
· Average net margin of 5.7% (2022: 5.1%)
· Earnings per share increased by 103% to 222.8p (2022: 109.6p)
· Final dividend declared increased by 2p to 27p (2022: 25p)
· Total dividend per share for the year of 46p (2022: 42p), an increase of 10%
· Net assets of £252.4m (2022: £212.0m)
· Year-end net assets per share of 1547p (2022: 1411p)
· CET1 ratio of 13.0% (2022: 11.6%) and total capital ratio of 15.2% (2022: 14.0%), well above the Group's minimum requirements
· Substantial surplus liquidity at the year-end of £962m above the regulatory minimum (2022: £535m)

[makinbuks] 19/10/2023 10:30

Update less than clear I would say at first read. Going against the trend ny renting larger central London offices

[rolo7] 18/10/2023 20:40

trading statement in the morning chart does not look great, raised 12million early in year above these share price levels, could directors take this private, proabably would if not a bank?!

[rolo7] 27/8/2023 19:05

yep sold out at moment uk recession more likely.

[makinbuks] 22/8/2023 09:57

Once again no momentum following the results

[makinbuks] 22/8/2023 09:56

Three new directors appointed. Not clear why they are suddenly necessary. Certainly not going to be branching into Fintech with those three!

[makinbuks] 16/8/2023 09:52

Possibly, the trouble is this share just isn't very well marketed. The results were great and we saw a nice jump but what's the next catalyst? Strategically ARB is a niche player in several banking sub sectors but that comes across as a bit confused and rather at the whim of the owner. Consolidation is quite possible and I could see ARB being taken out, possibly as a solution to Henry's retirement

[rolo7] 15/8/2023 20:17

Volume today more director buys or seller cleared?

[rolo7] 06/8/2023 21:28

Maybe some bank mergers small banks does the UK need so many banks and building society. Director age here will he decide to retire.

[makinbuks] 04/8/2023 10:42

Agree regarding results, the question is what will cause UK banks to re-rate. Ludicrous that they don't trade closer to NTA for example

[rolo7] 04/8/2023 06:56

yep interest rates to remain high for longer the banks are worth a look at. next years H1 results will be stunning.