We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Arbuthnot Banking Group Plc | LSE:ARBB | London | Ordinary Share | GB0007922338 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
5.00 | 0.49% | 1,027.50 | 995.00 | 1,060.00 | 1,000.00 | 1,000.00 | 1,000.00 | 766 | 16:35:07 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Commercial Banks, Nec | 181.44M | 35.38M | 2.1678 | 4.61 | 163.2M |
TIDMARBB
RNS Number : 5231E
Arbuthnot Banking Group PLC
19 July 2016
19 July 2016
ARBUTHNOT BANKING GROUP ("Arbuthnot", "the Group" or "ABG")
Results for the six months to 30 June 2016
"Period of Transition"
Arbuthnot Banking Group announces a half yearly profit of GBP225m.
Arbuthnot Banking Group PLC is the holding company for Arbuthnot Latham & Co., Limited and its associated company Secure Trust Bank PLC.
FINANCIAL HIGHLIGHTS
-- Profit for the period GBP225m (H1 2015: GBP12.7m) -- Underlying profit before tax GBP2.0m (H1 2015: GBP1.4m) -- Reported loss before tax on continuing ops GBP2.4m (H1 2015: GBP0.4m) -- Earnings per share GBP11.11 (H1 2015: GBP0.44) -- Interim dividend per share 13p (H1 2015: 12p) -- Special dividend 25p to be paid on 27 July 2016 * -- Net assets GBP282m (H1 2015: GBP179m) -- Net assets per share GBP18.52 (H1 2015: GBP11.74) -- Net assets increased almost six fold since December 2011 (GBP3.12 per share)
OPERATIONAL HIGHLIGHTS
-- Completed sale of Everyday Loans - gain on sale GBP117m -- Placed 33% stake in Secure Trust Bank generating a gain of GBP100m -- Purchased a GBP50m investment property in the West End -- Customer loans GBP657m (H1 2015: GBP584m) -- Customer deposits GBP940m (H1 2015: GBP770m) -- Assets Under Management GBP797m (H1 2015: GBP701m)
Commenting on the results, Sir Henry Angest, Chairman and Chief Executive of Arbuthnot, said:
"The Group has completed two significant transactions this year, which have substantially increased its financial resources. We are well positioned to accelerate the growth of Arbuthnot Latham and also to invest in other opportunities that may arise given the current volatile economic environment."
The interim results and presentation are available at http://www.arbuthnotgroup.com.
Secure Trust Bank PLC is today releasing its interim statement and it should be read in conjunction with these results.
*The Special dividend was indicated in the 2015 Final results as announced on 17 March 2016 and was dependant on the completion of the sale of Everyday Loans. The dividend was declared on 17 June 2016. ABG shares are currently trading "ex-div" of this dividend.
ENQUIRIES Arbuthnot Banking Group Sir Henry Angest, Chairman and Chief Executive Andrew Salmon, Group Chief Operating Officer James Cobb, Group Finance Director David Marshall, Director of Communications 020 7012 2400 Canaccord Genuity Ltd (Nominated Advisor) Sunil Duggal 020 7665 4500 Numis Securities Ltd (Broker) Chris Wilkinson Mark Lander 020 7260 1000 Bell Pottinger (Financial PR) Ben Woodford Sam Cartwright 020 3772 2588
Chairman's Statement
Arbuthnot Banking Group PLC
I can report that Arbuthnot Banking Group has delivered a profit for the period of GBP225m (H1 2015: GBP12.7m). This performance is the result of the completion of two significant corporate transactions. In April, following the agreement we reached with Non-Standard Finance in December 2015, the sale of Everyday Loans was completed. This generated a gain of GBP117m. In May we took the opportunity to reduce our holding in Secure Trust Bank from 51.9% to 18.9%. This transaction resulted in the sale of 6 million shares by way of an institutional placing at the price of GBP25.
The reduction in ownership means that STB is no longer a fully consolidated subsidiary of the Group and is now an associated company. As a result of this transaction the Group was able to recognise a gain of GBP100m. This marks a significant milestone in the history and development of the Group, as Arbuthnot Banking Group has now converted its investment in two subsidiaries into cash and most importantly regulatory capital. Currently, this makes it one of the most highly capitalised banking groups in the UK, with net assets of GBP282m, the equivalent of GBP18.52 per share. Since the end of 2011 the net assets of the Group have risen nearly six-fold from a little over GBP3 per share.
The Group will continue to invest in its remaining wholly owned subsidiary to accelerate the growth in the Private and also Commercial Banking business. Given the current market conditions, the Group will also explore other opportunities to enhance and diversify its income streams.
Meanwhile, given our reduced ownership, STB will now explore the opportunity of achieving a listing on the main market and will be able to expand its horizon for growth opportunities that enhanced access to capital markets will allow. We look forward to watching its continued success while maintaining a significant ownership investment.
Once again the quirks of IFRS accounting rules have done us no favours, and indeed do not make understanding these results easy for the readers. Both of the significant transactions and the earnings of the business in the first half are required to be presented as discontinued operations. This results in a loss before tax from continuing operations of GBP2.4m. However, going forward the Group will recognise 18.9% of the after tax profits of STB in its continuing profits, which are not included in these results. The Group also incurred certain remuneration costs totalling GBP2.3m in its continuing business segments that were dependant on, and fully attributable to the successful completion of the Everyday Loans transaction. These will not be recurring. Therefore on a pro forma basis the underlying performance of the Group's continuing operations is GBP2.0m, which is 45% up on the prior year.
Given the confidence in the future the Board has decided to increase the dividend by 1p to 13p, which will be paid on 30 September 2016 to shareholders on the register on 2 September.
The interim dividend comes on top of the special dividend of 25p that is due to be paid on 27 July 2016.
Private banking subsidiary - Arbuthnot Latham & Co., Limited
Arbuthnot Latham has reported a profit before tax for the half year of GBP4.5m (H1 2015: GBP3.7m) which includes the impact of the investment programme that commenced during 2015, with the building out of the commercial banking business and the banking infrastructure upgrade project. This has offset a 13% increase in revenues.
Customer assets have continued on a healthy growth trajectory, increasing by 14% to GBP657m (H1 2015: GBP584m), while deposits increased by 23% as the bank continued to attract new clients. Assets under management increased to GBP797m (H1 2015: GBP701m).
The investment in the commercial banking activities totalled GBP0.6m in the first half of the year. The proposition focuses on servicing SMEs and owner managed businesses providing its clients with excellent service. Three sector teams have already been established in London while further teams are due to establish a presence in Manchester and Exeter to cover the North and South West regions respectively. Staff numbers will reach thirty by the end of the third quarter and this will include seventeen relationship managers, all with twenty years or more commercial banking experience. We are confident that the proposition resonates well with both prospective clients and potential employees.
The bank was also delighted to complete the purchase of the property at 20 King Street in the West End on 23 June 2016 for GBP50.2m plus associated purchase costs. This is expected initially to be held as an investment property receiving approximately GBP1.8m rental income per year. In due course the bank will explore plans to establish a West End client office within the building, using the entrance on St James's Street.
Retail banking subsidiary - Secure Trust Bank PLC
Following the reduction in our shareholding in Secure Trust Bank, the Group will report its ongoing investment in the bank as Income from Associated Undertakings. This will represent the after tax earnings, which for the period from 15 June to the end of the first half was GBP0.3m.
The earnings of the bank up until this date have been reported as discontinued operations as per the accounting requirements.
On a pro forma basis the continuing Income from Associated Undertakings for the first half of 2016 would have been GBP2.5m (H1 2015: GBP1.6m).
Outlook
Given the result of the EU Referendum on 23 June 2016 the UK economy faces short-term economic volatility. However, Arbuthnot Banking Group is well positioned to prosper. It has not only divested its high margin lending business, which is the more likely to experience an uptick in impairments in an economic downturn, but also realised for cash a significant proportion of its investment in Secure Trust Bank. It is therefore highly capitalised and well placed to take advantage of any opportunities that may arise while continuing to invest in the growth of Arbuthnot Latham.
Consolidated Statement of Comprehensive Income
*Re-presented Six months Six months ended ended 30 June 30 June 2016 2015 Note GBP000 GBP000 --------------------------------------------------------------- ----- ----------- -------------- Interest income 15,988 13,371 Interest expense (4,105) (3,315) --------------------------------------------------------------- ----- ----------- --------------
Net interest income 11,883 10,056 --------------------------------------------------------------- ----- ----------- -------------- Fee and commission income 7,708 6,891 Fee and commission expense (376) (180) --------------------------------------------------------------- ----- ----------- -------------- Net fee and commission income 7,332 6,711 --------------------------------------------------------------- ----- ----------- -------------- Operating income 19,215 16,767 --------------------------------------------------------------- ----- ----------- -------------- Net impairment loss on financial assets (388) (708) Other income 2 1,665 - Profit from associates 265 - Operating expenses 3 (23,121) (16,472) --------------------------------------------------------------- ----- ----------- -------------- Loss from continuing operations before income tax (2,364) (413) Income tax (expense) / credit (539) 94 --------------------------------------------------------------- ----- ----------- -------------- Loss after income tax from continuing operations (2,903) (319) Profit from discontinued operations after tax 6 228,110 13,017 --------------------------------------------------------------- ----- ----------- -------------- Profit for the period 225,207 12,698 --------------------------------------------------------------- ----- ----------- -------------- Other comprehensive income Items that are or may be reclassified to profit or loss Available-for-sale reserve (2,321) - Available-for-sale reserve - Associate (209) - Tax on other comprehensive income 262 - --------------------------------------------------------------- ----- ----------- -------------- Other comprehensive income for the period, net of tax (2,268) - --------------------------------------------------------------- ----- ----------- -------------- Total comprehensive income for the period 222,939 12,698 --------------------------------------------------------------- ----- ----------- -------------- Profit attributable to: Equity holders of the Company 163,781 6,507 Non-controlling interests 61,426 6,191 --------------------------------------------------------------- ----- ----------- -------------- 225,207 12,698 --------------------------------------------------------------- ----- ----------- -------------- Total comprehensive income attributable to: Equity holders of the Company 161,513 6,507 Non-controlling interests 61,426 6,191 --------------------------------------------------------------- ----- ----------- -------------- 222,939 12,698 --------------------------------------------------------------- ----- ----------- -------------- * Prior year numbers have been re-presented for discontinuing operations (see note 6). Earnings per share for profit attributable to the equity holders of the Company during the period (expressed in pence per share): - basic 5 1,111.2 44.1 - diluted 5 1,107.5 43.6
Consolidated Statement of Financial Position
At 30 June 2016 2015 GBP000 GBP000 ASSETS Cash and balances at central banks 293,348 224,678 Loans and advances to banks 33,499 35,865 Debt securities held-to-maturity 103,131 98,143 Derivative financial instruments 1,228 1,634 Loans and advances to customers 657,122 1,436,381 Other assets 14,403 17,269 Financial investments 2,469 1,108 Deferred tax asset 1,714 1,770 Investment in associate 87,114 943 Intangible assets 7,004 11,100 Property, plant and equipment 5,216 13,475 Investment property 50,200 - --------------------------------------------- ---------- ---------- Total assets 1,256,448 1,842,366 ----------------------------------------------- ---------- ---------- EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital 153 153 Retained earnings 283,079 118,822 Other reserves (1,320) (1,263) ----------------------------------------------- ---------- ---------- Non-controlling interests - 61,716 ----------------------------------------------- ---------- ---------- Total equity 281,912 179,428 ----------------------------------------------- ---------- ---------- LIABILITIES Deposits from banks 1,986 10,871 Deposits from customers 939,539 1,604,929 Current tax liability 488 5,487 Other liabilities 20,335 31,256 Debt securities in issue 12,188 10,395 ----------------------------------------------- ---------- ---------- Total liabilities 974,536 1,662,938 ----------------------------------------------- ---------- ---------- Total equity and liabilities 1,256,448 1,842,366 ----------------------------------------------- ---------- ----------
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Group ------------------------------------------------------------------------------- Capital Share Revaluation redemption Available-for-sale Treasury Retained Non-controlling capital reserve reserve reserve shares earnings interests Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 -------------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- ---------- Balance at 1 January 2016 153 98 20 1,047 (1,131) 123,330 67,887 191,404 Total comprehensive income for the period Profit for the six months ended 30 June 2016 - - - - - 163,781 61,426 225,207 Other comprehensive income, net of income tax Revaluation reserve Cash flow hedging reserve Available-for-sale reserve - - - (1,572) - - (487) (2,059) Available-for-sale reserve - Associate - - - (209) - - - (209) -------------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- ---------- Total other comprehensive income - - - (1,781) - - (487) (2,268) -------------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- ---------- Total comprehensive income for the period - - - (1,781) - 163,781 60,939 222,939 -------------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- ---------- Transactions with owners, recorded directly in equity Contributions by and distributions to owners STB loss of control - (98) - 525 - (427) (124,046) (124,046) Equity settled share based payment
transactions - - - - - (1,074) 31 (1,043) Final dividend relating to 2015 - - - - - (2,531) (4,811) (7,342) Total contributions by and distributions to owners - (98) - 525 - (4,032) (128,826) (132,431) -------------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- ---------- Balance at 30 June 2016 153 - 20 (209) (1,131) 283,079 - 281,912 -------------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- ---------- Attributable to equity holders of the Group ------------------------------------------------------------------------------- Capital Share Revaluation redemption Available-for-sale Treasury Retained Non-controlling capital reserve reserve reserve shares earnings interests Total GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 --------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- -------- Balance at 1 January 2015 153 98 20 (250) (1,131) 114,641 60,038 173,569 Total comprehensive income for the period Profit for the six months ended 30 June 2015 - - - - - 6,507 6,191 12,698 Other comprehensive income, net of income tax Cash flow hedging reserve Total comprehensive income for the period - - - - - 6,507 6,191 12,698 --------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- -------- Transactions with owners, recorded directly in equity Contributions by and distributions to owners Equity settled share based payment transactions - - - - - 56 36 92 Final dividend relating to 2014 - - - - - (2,382) (4,549) (6,931) Total contributions by and distributions to owners - - - - - (2,326) (4,513) (6,839) --------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- -------- Balance at 30 June 2015 153 98 20 (250) (1,131) 118,822 61,716 179,428 --------------- -------- ------------ ----------- ------------------- --------- ---------- ---------------- --------
Consolidated Statement of Cash Flows
Six months Six months ended ended 30 June 30 June 2016 2015 GBP000 GBP000 ------------------------------------------------------------ ----------- ----------- Cash flows from operating activities Interest received 87,027 73,555 Interest paid (16,490) (12,512) Fees and commissions received 12,987 11,482 Cash payments to employees and suppliers (63,503) (49,020) Taxation paid (6,053) (1,163) -------------------------------------------------------------- ----------- ----------- Cash flows from operating profits before changes in operating assets and liabilities 13,968 22,342 Changes in operating assets and liabilities: - net decrease in derivative financial instruments 127 6 - net decrease/(increase) in loans and advances to customers 956,385 (283,097) - net decrease/(increase) in other assets 22,212 (403) - net decrease in deposits from banks (53,319) (16,786) - net (decrease)/increase in amounts due to customers (990,299) 410,644 - net decrease in other liabilities (20,342) (3,728) -------------------------------------------------------------- ----------- ----------- Net cash (outflow)/inflow from operating activities (71,268) 128,978 -------------------------------------------------------------- ----------- ----------- Cash flows from investing activities Purchase of financial investments (462) (1,580) Disposal of financial investments 837 1,602 Purchase of computer software (5,071) (1,200) Proceeds from sale of software 8,062 - Purchase of property, plant and equipment (51,139) (1,648) Proceeds from sale of property, plant and equipment 8,815 - Disposal of subsidiaries, net of cash and cash equivalents disposed 65,695 - Purchases of debt securities (59,893) (152,243) Proceeds from redemption of debt securities 41,424 145,783 -------------------------------------------------------------- ----------- ----------- Net cash inflow/(outflow) from investing activities 8,268 (9,286) -------------------------------------------------------------- ----------- ----------- Cash flows from financing activities Dividends paid (7,342) (6,931) -------------------------------------------------------------- ----------- ----------- Net cash used in financing activities (7,342) (6,931) -------------------------------------------------------------- ----------- ----------- Net (decrease)/increase in cash and cash equivalents (70,342) 112,761 Cash and cash equivalents at 1 January 397,189 147,782 -------------------------------------------------------------- ----------- ----------- Cash and cash equivalents at 30 June 326,847 260,543 -------------------------------------------------------------- ----------- -----------
1. Operating segments
The Group is organised into three main operating segments as disclosed below:
1) Retail banking - incorporating household cash management, personal lending and banking and insurance services.
2) UK Private banking - incorporating private banking, wealth management and commercial banking.
3) Group Centre - ABG Group Centre management.
Transactions between the operating segments are on normal commercial terms. Centrally incurred expenses are charged to operating segments on an appropriate pro-rata basis. Segment assets and liabilities comprise operating assets and liabilities, being the majority of the balance sheet.
Discontinued operations (Retail Banking) Continuing operations Retail Bank Associate UK Private Group Group ELL STB Total Income banking Centre Total Total Six months ended 30 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 June 2016 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Interest revenue 11,137 57,498 68,635 - 16,112 68 16,180 Inter-segment revenue - - - - (128) (64) (192) ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- Interest revenue from external customers 11,137 57,498 68,635 - 15,984 4 15,988 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- Fee and commission income 147 7,981 8,128 - 7,708 - 7,708 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- Revenue from external customers 11,284 65,479 76,763 - 23,692 4 23,696 ------------------------ -------- --------- --------- ----------- ----------- ---------- ----------
Interest expense - (12,107) (12,107) - (3,996) 64 (3,932) Add back inter-segment revenue - - - - 128 (128) - Subordinated loan note interest - - - - - (173) (173) Fee and commission expense (124) (779) (903) - (376) - (376) ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- Segment operating income 11,160 52,593 63,753 - 19,448 (233) 19,215 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- Impairment losses (2,610) (12,172) (14,782) - (388) - (388) Other income - - - - 1,665 - 1,665 Income from associates - - - 265 - - 265 Operating expenses (6,016) (29,073) (35,089) - (16,218) (6,903) (23,121) ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Segment profit / (loss) before tax 2,534 11,348 13,882 265 4,507 (7,136) (2,364) 11,518 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Income tax (expense) / income (507) (2,199) (2,706) - (48) (491) (539) (3,245) ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Segment profit / (loss) after tax 2,027 9,149 11,176 265 4,459 (7,627) (2,903) 8,273 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Profit on sale of discontinued operations 116,754 100,180 216,934 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Segment profit / (loss) after tax 118,781 109,329 228,110 265 4,459 (7,627) (2,903) 225,207 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Loans and advances to customers - - 657,122 - 657,122 657,122 Other assets - - 515,489 83,837 599,326 599,326 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Segment total assets - - - - 1,172,611 83,837 1,256,448 1,256,448 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Customer deposits - - 939,539 - 939,539 939,539 Other liabilities - - 179,577 (144,580) 34,997 34,997 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Segment total liabilities - - - - 1,119,116 (144,580) 974,536 974,536 ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ---------- Other segment items: Capital expenditure - (53,721) - (53,721) (53,721) Depreciation and amortisation - (753) (1) (754) (754) ------------------------ -------- --------- --------- ----------- ----------- ---------- ---------- ----------
The "Group Centre" segment above includes the parent entity and all intercompany eliminations. Segment profit is shown prior to any intra-group eliminations. The UK private bank opened a branch in Dubai in 2013. Other than the Dubai branch, all other operations of the Group are conducted wholly within the United Kingdom and therefore geographical information is not presented.
Discontinued operations (Retail Banking) Continuing operations Retail Bank Associate UK Private Group Group ELL STB Total Income banking Centre Total Total Six months ended 30 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 June 2015 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Interest revenue 19,574 44,588 64,162 - 13,460 60 13,520 Inter-segment revenue - (159) (159) - (89) (60) (149) ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- Interest revenue from external customers 19,574 44,429 64,003 - 13,371 - 13,371 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- Fee and commission income 1,086 8,396 9,482 - 6,891 - 6,891 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- Revenue from external customers 20,660 52,825 73,485 - 20,262 - 20,262 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- Interest expense - (9,769) (9,769) - (3,162) 172 (2,990) Add back inter-segment revenue - 159 159 - 89 (248) (159) Subordinated loan note interest - - - - - (166) (166) Fee and commission expense (1,249) (386) (1,635) - (180) - (180) ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- Segment operating income 19,411 42,829 62,240 - 17,009 (242) 16,767 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- Impairment losses (3,223) (7,995) (11,218) - (708) - (708) Operating expenses (10,608) (24,265) (34,873) - (12,640) (3,832) (16,472) ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Segment profit / (loss) before tax 5,580 10,569 16,149 - 3,661 (4,074) (413) 15,736 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Income tax (expense) / income (1,131) (2,001) (3,132) - - 94 94 (3,038) ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Segment profit / (loss) after tax 4,449 8,568 13,017 - 3,661 (3,980) (319) 12,698 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Loans and advances to customers 852,291 - 584,090 - 584,090 1,436,381 Other assets 149,701 - 281,135 (24,851) 256,284 405,985 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Segment total assets - - 1,001,992 - 865,225 (24,851) 840,374 1,842,366 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Customer deposits 835,083 - 769,846 - 769,846 1,604,929 Other liabilities 38,555 - 52,495 (33,041) 19,454 58,009 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Segment total liabilities - - 873,638 - 822,341 (33,041) 789,300 1,662,938 ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ---------- Other segment items: Capital expenditure (1,435) - (1,313) - (1,313) (2,748) Depreciation and amortisation (799) - (587) (5) (592) (1,391) ------------------------ --------- --------- ---------- ----------- ----------- --------- --------- ----------
2. Other income
As a result of the completion of the Visa Europe transaction the group realised a gain of GBP1.6m.
3. Operating expenses
Operating expenses include Group bonuses paid relating to the sale of the Everyday Loans Group amounting to GBP2.3m.
4. Underlying profit reconciliation
The profit before tax from continuing operations as reported in the operating segments can be reconciled to the underlying profit from continuing operations for the year as disclosed in the tables below.
Arbuthnot Arbuthnot Latham Banking Underlying profit reconciliation & Co. Group Six months ended 30 June 2016 GBP000 GBP000 ------------------------------------------------------- ---------- ---------- Profit / (loss) before tax from continuing operations 4,507 (2,364) ABG Group bonuses relating to sale of ELL - 2,304 STB full year equivalent associate income* - 2,261 AL realised profit on AFS investment (Visa) (1,665) (1,665) Investment in operating systems 260 260 AL commercial banking investment 567 567 AL incremental office space 650 650 ------------------------------------------------------- ---------- ---------- Underlying profit 4,319 2,013 ------------------------------------------------------- ---------- ---------- * - STB associate income adjustment (excl. ELL & bonuses relating to ELL sale) as if received from 1 January 2016. Arbuthnot Arbuthnot Latham Banking Underlying profit reconciliation & Co. Group Six months ended 30 June 2015 GBP000 GBP000 ------------------------------------------------------- ---------- ---------- Profit / (loss) before tax from continuing operations 3,661 (413) STB full year equivalent associate income* - 1,622 Investment in operating systems 170 170 AL commercial banking investment 13 13 ------------------------------------------------------- ---------- ---------- Underlying profit 3,844 1,392 ------------------------------------------------------- ---------- ---------- * - STB associate income adjustment (excl. ELL) as if received from 1 January 2015.
5. Earnings per ordinary share
Basic
Basic earnings per ordinary share are calculated by dividing the profit after tax attributable to equity holders of the Company by the weighted average number of ordinary shares 14,738,548 (2015: 14,738,548) in issue during the period. The weighted average number of ordinary shares has been restated for 2015 from 15,279,322, after taking into account treasury shares (390,274) and shares held in an ESOP trust (150,500).
Diluted
Diluted earnings per ordinary share are calculated by dividing the dilutive profit after tax attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, as well as the number of dilutive share options in issue during the period. The number of dilutive share options in issue at the end of June was 50,000 (2015: 200,000).
Six months Six months ended ended 30 June 30 June 2016 2015 Profit attributable GBP000 GBP000 ------------------------------------------------------------------- ----------- ----------- Total profit after tax attributable to equity holders of the Company 163,781 6,507 Loss after tax from continuing operations attributable to equity holders of the Company (2,903) (319) Profit after tax from discontinuing operations (ELL) attributable to equity holders of the Company 61,667 2,310 Profit after tax from discontinuing operations (STB) attributable to equity holders of the Company 105,017 4,516 ------------------------------------------------------------------- ----------- ----------- Six months Six months ended ended 30 June 30 June 2016 2015 Dilutive profit attributable GBP000 GBP000 ------------------------------------------------------------------- ----------- ----------- Total profit after tax attributable to equity holders of the Company 163,781 6,507 Profit after tax from continuing operations attributable to equity holders of the Company (2,903) (319) Profit after tax from discontinuing operations (ELL) attributable to equity holders of the Company 61,667 2,310 Profit after tax from discontinuing operations (STB) attributable to equity holders of the Company 105,017 4,516 ------------------------------------------------------------------- ----------- ----------- Six months Six months ended ended 30 June 30 June 2016 2015 Basic Earnings per share p p ------------------------------------------------------------------- ----------- ----------- Total Basic Earnings per share 1,111.2 44.1 Basic Earnings per share from continuing operations (19.7) (2.2) Basic Earnings per share from discontinuing operations - ELL 418.4 15.7 Basic Earnings per share from discontinuing operations - STB 712.5 30.6 ------------------------------------------------------------------- ----------- ----------- Six months Six months ended ended 30 June 30 June 2016 2015 Diluted Earnings per share p p ------------------------------------------------------------------- ----------- ----------- Total Diluted Earnings per share 1,107.5 43.6 Diluted Earnings per share from continuing operations (19.6) (2.1) Diluted Earnings per share from discontinuing operations - ELL 417.0 15.5 Diluted Earnings per share from discontinuing operations - STB 710.1 30.2 ------------------------------------------------------------------- ----------- -----------
6. Discontinued operations
The profit after tax from discontinued operations is made up as follows:
Six months Six months ended ended 30 June 30 June 2016 2015 Discontinued operations GBP000 GBP000 ----------------------------------------------------- ----------- ----------- Profit after tax from discontinued operations - ELL (up to 13 April 2016) 2,027 4,449 Profit after tax on sale of discontinued operations - ELL 116,754 - Profit after tax from discontinued operations - STB (up to 15 June 2016) 9,149 8,568 Profit after tax on sale of discontinued operations - STB 100,180 - ----------------------------------------------------- ----------- ----------- Profit after tax from discontinued operations 228,110 13,017 ------------------------------------------------------- ----------- -----------
On 4 December 2015, the Bank agreed to the conditional sale of its non-standard consumer lending business, ELL, which comprises Everyday Loans Holdings Limited and subsidiary companies Everyday Lending Limited and Everyday Loans Limited, to Non Standard Finance PLC (NSF) for GBP106.9 million in cash subject to a net asset adjustment and GBP16.3 million in NSF ordinary shares. The Disposal completed on 13 April 2016, and on completion, NSF repaid intercompany debt of GBP108.1 million to STB. After selling costs of GBP6.2m, this resulted in a gain recognised on disposal of GBP113.3m.
Details of the profits of discontinued operations, net assets disposed of and consequential gain recognised on disposal and cash flow from discontinued operations is set out below.
From 1 January Six months to 13 ended April 30 June 2016 2015 Note GBP000 GBP000 --------------------------------------------- ------ ----------- ----------- Interest income 11,137 19,574 Net interest income 11,137 19,574 --------------------------------------------- ------ ----------- ----------- Fee and commission income 147 1,086 Fee and commission expense (124) (1,249) --------------------------------------------- ------ ----------- ----------- Net fee and commission income 23 (163) --------------------------------------------- ------ ----------- ----------- Operating income 11,160 19,411 --------------------------------------------- ------ ----------- ----------- Net impairment loss on financial assets (2,610) (3,223) Operating expenses (6,016) (10,608) --------------------------------------------- ------ ----------- ----------- Profit before tax 2,534 5,580 Tax expense (507) (1,131) --------------------------------------------- ------ ----------- ----------- Profit after tax 2,027 4,449 --------------------------------------------- ------ ----------- ----------- Profit on sale of business 116,754 - --------------------------------------------- ------ ----------- ----------- Total profit from discontinued operation 118,781 4,449 --------------------------------------------- ------ ----------- ----------- Profit attributable to: Equity holders of the Company 61,667 2,310 Non-controlling interests 57,114 2,139 --------------------------------------------- ------ ----------- ----------- Profit after tax 118,781 4,449 --------------------------------------------- ------ ----------- ----------- Earnings per share for profit attributable to the equity holders of the Company from discontinued operations during the year (expressed in pence per share): - basic 5 418.4 15.7 - diluted 5 417.0 15.5 The following unaudited assets were sold as part of the sale of ELL: Recognised values on sale 2016 GBP000 ----------------------------------------------------------------------- ----------- Loans and advances to banks 457 Loans and advances to customers 116,744 Property, plant and equipment 452 Intangible assets 1,258 Deferred tax assets 371 Prepayments and accrued income 451 Other assets 11 ----------------------------------------------------------------------- ----------- Total assets 119,744 Intercompany funding 108,088 Current tax liability 3,212 Other liabilities 4,748 ----------------------------------------------------------------------- ----------- Total liabilities 116,048 Net identifiable assets / (liabilities) 3,696 ----------------------------------------------------------------------- ----------- Consideration 123,206 Costs (2,756) Profit on sale of ELL 116,754 ----------------------------------------------------------------------- ----------- The intercompany funding was repaid by NSF at the time of completion. From 1 January Six months to 13 ended Cash flow from discontinued operations - ELL April 30 June 2016 2015 GBP000 GBP000 ------------------------------------------------------ ----------- ----------- Cash flows from operating activities Interest received 11,137 19,574 Fees and commissions received 23 (163) Cash payments to employees and suppliers (8,626) (13,831) Taxation (paid)/received (507) (1,131) -------------------------------------------------------- ----------- ----------- Cash flows from operating profits before changes in operating assets and liabilities 2,027 4,449 Changes in operating assets and liabilities: - net increase in loans and advances to customers (3,618) (11,427) - net decrease in other assets (249) 407 - net increase in other liabilities 2,621 5,146 -------------------------------------------------------- ----------- ----------- Net cash inflow/(outflow) from operating activities 781 (1,425) -------------------------------------------------------- ----------- ----------- Cash flows from investing activities Purchase of property, plant and equipment (9) (179) Net cash from investing activities (9) (179) -------------------------------------------------------- ----------- ----------- Cash flows from financing activities Increase in borrowings Dividends paid Net increase/(decrease) in cash and cash equivalents 772 (1,604) Cash and cash equivalents at 1 January 1,661 1,623 -------------------------------------------------------- ----------- ----------- Cash and cash equivalents at 13 April / 30 June 2,433 19 -------------------------------------------------------- ----------- -----------
On 15 June 2016 Arbuthnot Banking Group ('ABG') sold 6 million shares in Secure Trust Bank PLC ('STB'), which reduced its shareholding in STB from 51.92% to 18.93%. From this date the Group accounted for its remaining shareholding in STB as an associate. After the sale of the 6 million shares, the Group retained Board representation and as such is seen to have significant influence over STB. The profit and cash flow from discontinued operations relating to ELL have been shown in the tables above. The ELL entities were subsidiaries of STB and therefore formed part of the STB number reported in the operating segments of ABG. The tables below therefore reflect the profit and cash flow from the STB group excluding ELL. The combined impact can be seen in the operating segments (see note 1 - Retail banking).
From 1 January Six months to 15 ended June 30 June 2016 2015 Note GBP000 GBP000 --------------------------------------------- ------ ----------- -----------
Interest income 57,498 44,588 Interest expense (12,107) (9,769) --------------------------------------------- ------ ----------- ----------- Net interest income 45,391 34,819 --------------------------------------------- ------ ----------- ----------- Fee and commission income 7,981 8,396 Fee and commission expense (779) (386) --------------------------------------------- ------ ----------- ----------- Net fee and commission income 7,202 8,010 --------------------------------------------- ------ ----------- ----------- Operating income 52,593 42,829 --------------------------------------------- ------ ----------- ----------- Net impairment loss on financial assets (12,172) (7,995) Operating expenses (29,074) (24,265) --------------------------------------------- ------ ----------- ----------- Profit before tax 11,347 10,569 Tax expense (2,198) (2,001) --------------------------------------------- ------ ----------- ----------- Profit after tax 9,149 8,568 --------------------------------------------- ------ ----------- ----------- Profit on sale of shares 100,180 - --------------------------------------------- ------ ----------- ----------- Total profit from discontinued operation 109,329 8,568 --------------------------------------------- ------ ----------- ----------- Profit attributable to: Equity holders of the Company 105,017 4,516 Non-controlling interests 4,312 4,052 --------------------------------------------- ------ ----------- ----------- Profit after tax 109,329 8,568 --------------------------------------------- ------ ----------- ----------- Earnings per share for profit attributable to the equity holders of the Company from discontinued operations during the year (expressed in pence per share): - basic 5 712.5 30.6 - diluted 5 710.1 30.2 The following unaudited assets were deconsolidated as part of the sale of 6 million shares in STB: Recognised values on sale 2016 GBP000 ------------------------------------------------------------ ------------ Cash and balances at central banks 176,647 Loans and advances to banks 27,618 Loans and advances to customers 1,117,700 Other assets 5,805 Financial investments 15,030 Deferred tax asset 606 Intangible assets 7,017 Property, plant and equipment 8,606 ------------------------------------------------------------ ------------ Total assets 1,359,029 Deposits from banks 25,000 Deposits from customers 1,046,009 Current tax liability 293 Other liabilities 29,748 ------------------------------------------------------------ ------------ Total liabilities 1,101,050 Net identifiable assets 257,979 ------------------------------------------------------------ ------------ Profit on sale of shares were calculated as follows: 2016 GBP000 ------------------------------------------------------------ ------------ Consideration received 150,000 Less costs (2,001) Less net identifiable assets (257,979) Add back non-controlling interest 124,046 Add back fair value of remaining investment in STB 86,114 Profit on sale of STB 100,180 ------------------------------------------------------------ ------------ From 1 January Six months Cash flow from discontinued operations - STB excluding to 15 ended ELL June 30 June 2016 2015 GBP000 GBP000 -------------------------------------------------------- ----------- ----------- Cash flows from operating activities Interest received 68,635 44,667 Interest paid (12,107) (9,841) Fees and commissions received 7,226 7,995 Cash payments to employees and suppliers (51,552) (32,413) Taxation (paid)/received (6,034) (1,977) ---------------------------------------------------------- ----------- ----------- Cash flows from operating profits before changes in operating assets and liabilities 6,168 8,431 Changes in operating assets and liabilities: - net increase in loans and advances to customers (165,976) (229,688) - net decrease in other assets 117,395 (661) - net / in deposits from banks (10,000) 24,285 - net / in amounts due to customers 12,936 226,690 - net increase in other liabilities (5,031) (1,164) ---------------------------------------------------------- ----------- ----------- Net cash (outflow)/inflow from operating activities (44,508) 27,893 ---------------------------------------------------------- ----------- ----------- Cash flows from investing activities Purchase of computer software (1,754) (433) Purchase of property, plant and equipment (531) (884) Disposal of property, plant and equipment 2,179 - Proceeds from disposal of businesses 106,912 - Proceeds from sale of property, plant and equipment 456 - Net cash inflow/(outflow) from investing activities 107,262 (1,317) ---------------------------------------------------------- ----------- ----------- Cash flows from financing activities Increase in borrowings Dividends paid (10,005) (9,500) Net cash used in financing activities (10,005) (9,500) ---------------------------------------------------------- ----------- ----------- Net increase in cash and cash equivalents 52,749 17,076 Cash and cash equivalents at 1 January 141,595 104,530 ---------------------------------------------------------- ----------- ----------- Cash and cash equivalents at 15 June / 30 June 194,344 121,606 ---------------------------------------------------------- ----------- -----------
7. Basis of reporting
The interim financial statements have been prepared on the basis of accounting policies set out in the Group's 2015 statutory accounts as amended by standards and interpretations effective during 2016 and in accordance with IAS 34 "Interim Financial Reporting" (except for comparatives in the statement of financial position). The directors do not consider the fair value of the assets and liabilities presented in these financial statements to be materially different from their carrying value.
The statements were approved by the Board of Directors on 18 July 2016 and are unaudited. The interim financial statements will be posted to shareholders and copies may be obtained from The Company Secretary, Arbuthnot Banking Group PLC, Arbuthnot House, 7 Wilson Street, London EC2M 2SN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAKXPFDPKEFF
(END) Dow Jones Newswires
July 19, 2016 02:00 ET (06:00 GMT)
1 Year Arbuthnot Banking Chart |
1 Month Arbuthnot Banking Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions