Arbuthnot Banking Share Discussion Threads

[petewy] 18/7/2023 09:15

Good results. Share boost.

[rolo7] 28/6/2023 16:15

Buyers coming in for this forecast over 200p EPS this year, no idea who took the other shares at the recent placing!? Must want to stay below 3%. Big dividends on way here possibly?!

[rolo7] 23/6/2023 08:50

oh yes can see this being above expectations in results late july.

[retsius] 23/6/2023 08:47

BOE interest rise:good news for Arbuthnot?

[davebowler] 24/5/2023 09:09

Shore Capital

Summary. Arbuthnot has issued a positive trading update, covering four months to 30 April, ahead of an AGM later today. The statement conveys a good start to FY23F. The company continues to benefit from rising interest rates, whereby the increase in deposit costs lags the upward repricing of assets. Loan growth has moderated slightly following a tightening of credit criteria whilst deposit balances have continued to grow. A £12m fundraise in April has increased surplus capital and liquidity, providing the company with significant optionality to seize opportunities emerging from market disruption, particularly if uncertainty prevails in the non-bank space. Part of the proceeds have been used to purchase £42m of assets (at a discount to book value) for the Asset Alliance vehicle leasing business. With a prevailing fair value estimate of 1640p, we continue to see ARBB’s valuation as undemanding with trailing P/TNAV at 0.8x against a business able to sustain a low/mid-teens RoTE, with further support from dividends yielding c.5%. HOUSE STOCK. Forecasts. We will review our forecasts shortly to incorporate recent changes in the UK base rate, the April fundraise and Asset Alliance’s acquisition of operating lease assets. We continue to envisage positive momentum in forecasts even after publishing five material upgrades over the past year, the last of which followed FY22 results on 30 March: Resilient deposits & abundant liquidity. Detail. Loan balances including lease assets at 30 April were £2,234m, +1% compared to 31 Dec and +8% YoY. Deposits at 30 April were £3,255m, +4% YTD and +18% YoY. AuM in the wealth division was £1,376m, +4% YTD and +2% YoY. ARBB remains focused on client service and longterm relationship building to drive sustainable deposit and loan growth. The capture of spread through deposits (i.e. slower upward repricing vs. base rate increases) reflects the mix, which includes current and relationship accounts. ARBB continues to focus on balance sheet efficiency, allowing capital intensive lending to mature and roll off, to be replaced by more capital efficient lending. The challenging macroeconomic environment is resulting in some signs of loan book stress, however given low average LTVs across the overall book, defaults are not expected to entail meaningful incremental losses.

[makinbuks] 03/4/2023 18:10

Just read a piece from Shore saying STB are undervalued on a PE of 4.8 and yielding 5.2%. I detest brokers targets but for the record they say £10 from the current £6.80

[makinbuks] 03/4/2023 17:23

Special dividend I fully agree.

Longer and more persistent inflation I also agree but interest rates are not the answer to OPEC driven oil price increases. As the twin squeeze of higher rates and the liquidity crisis take effect we will move into recession or very low growth and the central banks will respond by loosening conditions again. About 2/3rds of the current fiscal tightening has yet to be felt but that will change in the coming twelve months

[rolo7] 03/4/2023 17:15

Makinbuks agree but with the surprise oil cut today the west are not going to stop inflation rising as they dont control opec? or have big energy producers. Opportunties for special dividend also here.

[makinbuks] 03/4/2023 16:53

Don't disagree with your analysis Rolo and certainly ARBB is looking value here but a PE of 4 - 6 is probably about right for the sector bearing in mind interest rates are likely to fall again in 2024 and the credit squeeze will increase bad debts

[rolo7] 03/4/2023 15:25

Arbb all about future Pe for this year 23. Looking back
H1 22 pbt 3.4m
5/10/22 ahead of expectations then 13mpbt and 4million pbt nearly for sept 22.
23/2/23 ahead of expectations again now 17.3mpbt interest rate benefits and business model set up for higher interest rates.
30/3/23 pbt 20million.
so h2 22 pbt was 16m say double for 32pbt for 2023 low estimate.
or septemeber 22 pbt =4million times 12 for 48mbpt for 2023.
pe range of 5.6, 3.68 using 20% tax rate interesting.

[pvb] 03/4/2023 11:30

...Yes. Interesting. Mind you, STB's share price has not so far proven particularly dynamic.

[makinbuks] 03/4/2023 10:36

Yes use "fiasco" was inappropriate but even at the time I thought it was an odd redeployment of capital. I never understood the indecent haste to exit Secure Trust when its growth prospects and fleet of foot seemed so much more dynamic than that of ARBB itself. All irrelevant now

[1tx] 03/4/2023 10:22

I don't think when ARBB bought the prime King St property they could have anticipated Lockdown & the effect this would have on office property values.In the circumstances they did well to get the price they did;in general office properties have declined by a far greater percentage in value and are difficult to sell.The quality/location of the property minimised the loss.

Although ARBB is valued at a big discount to book NAV;its PE is higher than some others in this sector.The illiquid nature of the share probably limits interest;but on the other hand our Chairman Sir Henry Angest with a 56% holding,around £90m, certainly has a lot more at stake than we have and has been here and built the company up since it was a very small operation in Birmingham over most of his working life.

[makinbuks] 31/3/2023 20:03

I agree the investment in the building, which was part of the use of funds in disposing of Secure Trust Bank, was a fiasco. However, old news and already factored into the NBV at £14 so lets look forward. Solid deposit base good margins on lending, can they keep defaults down?

[rolo7] 31/3/2023 17:43

No interest whatso every and the results including a 4million lost on commercial property sell.

[c3479z1] 30/3/2023 11:18

results look good, if any bank is safe then ARBB must be, but refuse to invest further in the sector with impenetrable accounts and external factors weighing over which they've no control;

[petewy] 30/3/2023 10:24

results looking good.

[rolo7] 29/3/2023 15:06

Results tomorrow pre tax above expectations of 17miiliom£ director buying months ago big dividend expected?!

[rolo7] 08/3/2023 10:33

Bid price finally moved up

[rolo7] 24/2/2023 08:08

eps forecast 22 121p
23 159p so pe5.6
we know arbb did 4 million pre tax in month of september (lower interest rates) so times 12month= 48million pre tax for 2023 say 40million after tax. 141mc/40= pe 3.5 from september numbers cheap
cgt changes will make a few more seller who are not holding in isas

[c3479z] 23/2/2023 18:38

how do they come out with an above expectation announcement and the share price doesn't move...?

[rolo7] 23/2/2023 08:20

Above new market expectations of 16.5m pre tax short and sweet ts that. 2 profit upgrades now for a 2023 upgrade at results and special dividend? note staff payment of 1.5k last year.

[rolo7] 20/2/2023 10:05

From the TS for 3 months to end sep22. This is cheap at 4mpbt a month mc 131million the below figures are before the interest rate rises since september, trading statement for year end on thursday should smash the 13million the market expects for 2022 and upgrades for 23 as little or no recession.

In September the underlying monthly profit before tax was approaching £4m
(excluding the one-off cost of living bonus payment made to all employees that
was signalled in the Group's Interim results released on 19 July 2022). Any
future base rate increases will continue to have a corresponding positive
impact on the Group's revenue, as approximately £2.6bn of the Group's assets
(loans and liquidity assets) have variable interest rates linked to the base
rate. Accordingly, the Board expects that both reported and underlying profit
for the year ending 31 December 2022 will be ahead of market expectations.

[rolo7] 10/2/2023 09:23

No recession just

[rolo7] 10/1/2023 11:55

Here we go! UK retail spending not so bad all scaling down to value retailers