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STB Secure Trust Bank Plc

457.00
5.00 (1.11%)
Last Updated: 10:00:55
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Secure Trust Bank Plc LSE:STB London Ordinary Share GB00B6TKHP66 ORD 40P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  5.00 1.11% 457.00 453.00 459.00 457.00 457.00 457.00 5,873 10:00:55
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Commercial Banks, Nec 185.5M 24.3M 1.2742 3.59 86.2M

Arbuthnot Banking Group PLC Half Yearly Report (5187I)

26/07/2012 7:00am

UK Regulatory


Secure Trust Bank (LSE:STB)
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TIDMARBB TIDMSTB

RNS Number : 5187I

Arbuthnot Banking Group PLC

26 July 2012

26 July 2012

For immediate release

ARBUTHNOT BANKING GROUP ("Arbuthnot" or "the Group")

Results for the six months to 30 June 2012

Transformation continues

Arbuthnot Banking Group has continued with the transformation of its business and has traded strongly in the first half of 2012. During this period the Group completed the disposal of the securities and Swiss businesses, cancelled the share premium account and considerably expanded the retail banking division through the acquisition of Everyday Loans. It has recorded a profit before tax of GBP10.8m and both of its Banks have continued to demonstrate strong, controlled organic growth.

Arbuthnot Banking Group PLC is the holding company for Arbuthnot Latham & Co., Limited and Secure Trust Bank PLC.

FINANCIAL HIGHLIGHTS

   --      Group pre-tax profit GBP10.8m (2011: GBP0.2m) 
   --      Gain on acquisition GBP8.5m (net) 
   --      Customer assets GBP543.4m (2011: GBP356.2m) 
   --      Group earnings per share (EPS) 50.9p (2011: 8.4p) 
   --      Interim dividend per share (DPS) 11p (2011: 11p) 

OPERATIONAL HIGHLIGHTS

Retail Banking - Secure Trust Bank

   --      Pre-tax profit increased to GBP12.5m (2011: GBP5.0m) 

-- Acquisition of Everyday Loans has broadened distribution channels and added further diversification to its lending portfolios and contributed a gain on acquisition of GBP8.5m (net)

   --      Underlying profit grew by 50% 

-- Overall loan book increased to GBP260.3m from GBP123.9m including GBP71m from Everyday Loans

   --      Retail deposits funded loan growth and closed the period at GBP297.9m (2011: GBP217m) 
   --      Total customer numbers grew by 58% to 198,767. 

Private Banking - Arbuthnot Latham

   --      Pre-tax profits increased to GBP1.4m (2011: GBP1.0m) 
   --      James Fleming joined the business as Chief Executive at the end of the first quarter 

-- Strong capital base and excess liquidity enabled the business to maintain its ability to take advantage of the lending opportunities

-- Gilliat Financial Solutions has consistently increased its sales volumes and completed its first overseas product offering

Commenting on the results, Henry Angest, Chairman and Chief Executive of Arbuthnot, said: "This year has been one of continued transformation where significant milestones across the Group have been achieved. All of these have enabled the Group to make good progress.

The current market environment has allowed the Group to attract high calibre people, who along with strong capital and liquidity are enabling it to enhance significantly both its banking businesses. However, we remain cautious and monitor the developments in the wider economy with some concern."

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.

ENQUIRIES:

 
 Arbuthnot Banking Group 
  Henry Angest, Chairman and Chief Executive 
  Andrew Salmon, Chief Operating Officer 
  James Cobb, Group Finance Director 
  David Marshall, Director of Communications    020 7012 2400 
 
 Canaccord Genuity Hawkpoint Partners Ltd 
  (Nominated Advisor) 
  Lawrence Guthrie 
  Sunil Duggal                                  020 7665 4500 
 
 Numis Securities Ltd (Broker) 
  Chris Wilkinson 
  Mark Lander                                   020 7260 1000 
 
 Pelham Bell Pottinger (Financial PR) 
  Ben Woodford 
  Dan de Belder                                 020 7861 3232 
 

Chairman's Statement

Arbuthnot Banking Group PLC

I am pleased to report that Arbuthnot Banking Group PLC has traded strongly in the first half of 2012. The Group has reported a profit before tax of GBP10.8m (2011: GBP0.2m).

In our recent Annual Report I concluded that 2011 had been a year of transformation. This process continued in 2012. Across the Group significant objectives have been achieved. In the first part of the year, the disposals of Arbuthnot Securities and the Swiss subsidiary were completed. Then in June we finalised the cancellation of the share premium account and considerably expanded the business of Secure Trust Bank through the acquisition of Everyday Loans. These transactions enable the Group to take advantage of current market conditions.

The Board is maintaining the interim dividend at 11p (gross) which will be paid on 5 October 2012 to shareholders on the register at 7 September 2012.

Retail Banking Subsidiary - Secure Trust Bank PLC

Pre-tax profits for Secure Trust Bank rose to GBP12.5m (2011: GBP5.0m). This includes GBP8.5m (net) gain on acquisition, which arose from the accounting required for the purchase of Everyday Loans. We expect most of this will be amortised over the next 2-3 years. Excluding the impact of this the underlying profit before tax rose by 50%.

The acquisition of Everyday Loans continues to broaden Secure Trust Bank's distribution channels and further diversifies its lending portfolios.

As at 30 June 2012, the Bank's overall loan book had increased to GBP260.3m (2011: GBP123.9m) as organic lending also contributed significantly to the overall growth. The Management are confident that this growth can be maintained as evidenced by the recent signing of an affinity agreement with Shop Direct.

The loan book continues to be funded by growth in retail deposits which closed the period at GBP297.9m (2011: GBP217m), an increase of 37%.

The total customer numbers increased to 198,767 a 58% growth.

Private Banking Subsidiary - Arbuthnot Latham & Co., Limited

Arbuthnot Latham's profits grew to GBP1.4m (2011:GBP1.0m), a 40% increase over the corresponding period.

James Fleming joined the business as Chief Executive at the end of the first quarter.

The business has maintained its ability to take advantage of good quality lending opportunities, which has been facilitated by the strong capital base and by utilising some of the excess liquidity held at the year end.

Gilliat Financial Solutions, the independent provider of structured products, has consistently increased its sales volumes as it has developed its brand awareness across the UK IFA network. It also completed its first overseas product offering during the period.

Outlook

The outlook for both banks remains favourable as opportunities for growth continue to present themselves. The current market environment has allowed the Group to attract high calibre people, who along with strong capital and liquidity are significantly enhancing both its banking businesses. However, we remain cautious and monitor the developments in the wider economy with some concern.

Consolidated Statement of Comprehensive Income

 
                                                               Six months   Six months 
                                                                    ended        ended 
                                                                  30 June      30 June 
                                                                     2012         2011 
                                                        Note       GBP000       GBP000 
-----------------------------------------------------  -----  -----------  ----------- 
 Interest and similar income                                       22,438       16,507 
 Interest expense and similar charges                             (6,840)      (4,673) 
-----------------------------------------------------  -----  -----------  ----------- 
 Net interest income                                               15,598       11,834 
-----------------------------------------------------  -----  -----------  ----------- 
 Fee and commission income                                         10,857        9,766 
 Fee and commission expense                                         (254)        (163) 
-----------------------------------------------------  -----  -----------  ----------- 
 Net fee and commission income                                     10,603        9,603 
-----------------------------------------------------  -----  -----------  ----------- 
 Gains less losses from dealing in securities                       (314)           24 
-----------------------------------------------------  -----  -----------  ----------- 
 Operating income                                                  25,887       21,461 
-----------------------------------------------------  -----  -----------  ----------- 
 Net impairment loss on financial assets                          (3,679)      (1,997) 
 Other income                                              2        9,947          408 
 Operating expenses                                        3     (21,387)     (16,239) 
-----------------------------------------------------  -----  -----------  ----------- 
 Profit before income tax from continuing operations               10,768        3,633 
 Income tax expense                                                 (133)      (1,120) 
-----------------------------------------------------  -----  -----------  ----------- 
 Profit after income tax from continuing operations                10,635        2,513 
 Loss from discontinued operations after tax                        (210)      (2,429) 
-----------------------------------------------------  -----  -----------  ----------- 
 Profit for the period                                             10,425           84 
-----------------------------------------------------  -----  -----------  ----------- 
 
 Foreign currency translation reserve                                 570        (202) 
 Revaluation reserve 
 - Adjustment                                                           -          (2) 
 Cash flow hedging reserve 
 - Effective portion of changes in fair value                        (97)            - 
 Available-for-sale reserve                                             -            5 
-----------------------------------------------------  -----  -----------  ----------- 
 Other comprehensive income for the period, net of 
  income tax                                                          473        (199) 
-----------------------------------------------------  -----  -----------  ----------- 
 Total comprehensive income for the period                         10,898        (115) 
-----------------------------------------------------  -----  -----------  ----------- 
 
 Profit attributable to: 
 Equity holders of the Company                                      7,783        1,259 
 Non-controlling interests                                          2,642      (1,175) 
-----------------------------------------------------  -----  -----------  ----------- 
                                                                   10,425           84 
-----------------------------------------------------  -----  -----------  ----------- 
 
 Total comprehensive income attributable to: 
 Equity holders of the Company                                      8,256        1,060 
 Non-controlling interests                                          2,642      (1,175) 
-----------------------------------------------------  -----  -----------  ----------- 
                                                                   10,898        (115) 
-----------------------------------------------------  -----  -----------  ----------- 
 
 Earnings per share for profit attributable to the 
  equity holders of the Company during the period 
 (expressed in pence per share): 
 - basic and fully diluted                                 4         50.9          8.4 
 

Consolidated Statement of Financial Position

 
                                                   At 30 June 
                                                   2012      2011 
                                                 GBP000    GBP000 
 ASSETS 
 Cash                                           129,137   118,629 
 Loans and advances to banks                     50,249    51,669 
 Loans and advances to customers                543,379   356,162 
 Trading securities - long positions                  -     2,148 
 Debt securities held-to-maturity                32,757   125,192 
 Current tax asset                                  483         - 
 Other assets                                    10,141    16,984 
 Financial investments                            3,269     5,737 
 Intangible assets                                8,618     3,002 
 Property, plant and equipment                    6,055     5,546 
 Deferred tax asset                               5,967     1,303 
---------------------------------------------  --------  -------- 
 Total assets                                   790,055   686,372 
---------------------------------------------  --------  -------- 
 EQUITY AND LIABILITIES 
 Equity attributable to owners of the parent 
 Share capital                                      153       150 
 Share premium account                                -    21,085 
 Retained earnings                               48,358    11,647 
 Other reserves                                 (1,397)   (1,546) 
---------------------------------------------  --------  -------- 
 Non-controlling interests                        8,640       943 
---------------------------------------------  --------  -------- 
 Total equity                                    55,754    32,279 
---------------------------------------------  --------  -------- 
 LIABILITIES 
 Deposits from banks                              1,113     2,024 
 Trading securities - short positions                 -       999 
 Derivative financial instruments                 1,008       264 
 Deposits from customers                        703,661   624,215 
 Current tax liability                                -       414 
 Other liabilities                               16,727    12,821 
 Deferred tax liability                               -       126 
 Debt securities in issue                        11,792    13,230 
---------------------------------------------  --------  -------- 
 Total liabilities                              734,301   654,093 
---------------------------------------------  --------  -------- 
 Total equity and liabilities                   790,055   686,372 
---------------------------------------------  --------  -------- 
 

Consolidated Statement of Changes in Equity

 
                                                     Attributable to equity holders of the Group 
                 ------------------------------------------------------------------------------------------------------------------ 
                                           Foreign                                                      Cash 
                               Share      currency                    Capital                           flow 
                    Share    premium   translation   Revaluation   redemption   Available-for-sale   hedging   Treasury    Retained   Non-controlling 
                  capital    account       reserve       reserve      reserve              reserve   reserve     shares    earnings         interests     Total 
                   GBP000     GBP000        GBP000        GBP000       GBP000               GBP000    GBP000     GBP000      GBP000            GBP000    GBP000 
---------------  --------  ---------  ------------  ------------  -----------  -------------------  --------  ---------  ----------  ----------------  -------- 
 Balance at 1 
  January 
  2012                153     21,085         (570)           140           20                    -     (329)    (1,097)      21,571             5,998    46,971 
 
 Total 
 comprehensive 
 income for the 
 period 
 Profit for the 
  six 
  months ended 
  30 
  June 2012             -          -             -             -            -                    -         -          -       7,783             2,642    10,425 
 
 Other 
 comprehensive 
 income, net of 
 income 
 tax 
 Foreign 
  currency 
  translation 
  reserve               -          -           570             -            -                    -         -          -           -                 -       570 
 Revaluation 
 reserve 
 Cash flow 
 hedging 
 reserve 
 - Effective 
  portion 
  of changes in 
  fair 
  value                 -          -             -             -            -                    -      (97)          -           -                 -      (97) 
 Total other 
  comprehensive 
  income                -          -           570             -            -                    -      (97)          -           -                 -       473 
---------------  --------  ---------  ------------  ------------  -----------  -------------------  --------  ---------  ----------  ----------------  -------- 
 Total 
  comprehensive 
  income for 
  the period            -          -           570             -            -                    -      (97)          -       7,783             2,642    10,898 
---------------  --------  ---------  ------------  ------------  -----------  -------------------  --------  ---------  ----------  ----------------  -------- 
 
 Transactions 
 with 
 owners, 
 recorded 
 directly in 
 equity 
 Contributions 
 by 
 and 
 distributions 
 to owners 
 Transfer of 
  share 
  premium               -   (21,085)             -             -            -                    -         -          -      21,085                 -         - 
 Purchase of 
  own 
  shares                -          -             -             -            -                    -         -       (34)           -                 -      (34) 
 Final dividend 
  relating 
  to 2011               -          -             -             -            -                    -         -          -     (2,081)                 -   (2,081) 
 Total 
  contributions 
  by and 
  distributions 
  to owners             -   (21,085)             -             -            -                    -         -       (34)      19,004                 -   (2,115) 
---------------  --------  ---------  ------------  ------------  -----------  -------------------  --------  ---------  ----------  ----------------  -------- 
 Balance at 30 
  June 
  2012                153          -             -           140           20                    -     (426)    (1,131)      48,358             8,640    55,754 
---------------  --------  ---------  ------------  ------------  -----------  -------------------  --------  ---------  ----------  ----------------  -------- 
 
 
                                                  Attributable to equity holders of the 
                                                                   Group 
                 ------------------------------------------------------------------------------------------------------- 
                                          Foreign 
                              Share      currency                    Capital 
                    Share   premium   translation   Revaluation   redemption   Available-for-sale   Treasury    Retained   Non-controlling 
                  capital   account       reserve       reserve      reserve              reserve     shares    earnings         interests     Total 
                   GBP000    GBP000        GBP000        GBP000       GBP000               GBP000     GBP000      GBP000            GBP000    GBP000 
---------------  --------  --------  ------------  ------------  -----------  -------------------  ---------  ----------  ----------------  -------- 
 Balance at 1 
  January 
  2011                150    21,085         (558)           146           20                  142    (1,097)      12,142             2,118    34,148 
 
 Total 
 comprehensive 
 income for the 
 period 
 Profit / 
  (loss) for 
  the six 
  months ended 
  30 June 2011          -         -             -             -            -                    -          -       1,259           (1,175)        84 
 
 Other 
 comprehensive 
 income, net of 
 income 
 tax 
 Foreign 
  currency 
  translation 
  reserve               -         -         (202)             -            -                    -          -           -                 -     (202) 
 Revaluation 
 reserve 
 - Adjustment           -         -             -           (2)            -                    -          -           -                 -       (2) 
 - Amount 
  transferred 
  to profit and 
  loss on 
  sale                  -         -             -             -            -                    5          -           -                 -         5 
---------------  --------  --------  ------------  ------------  -----------  -------------------  ---------  ----------  ----------------  -------- 
 Total other 
  comprehensive 
  income                -         -         (202)           (2)            -                    5          -           -                 -     (199) 
---------------  --------  --------  ------------  ------------  -----------  -------------------  ---------  ----------  ----------------  -------- 
 Total 
  comprehensive 
  income for 
  the period            -         -         (202)           (2)            -                    5          -       1,259           (1,175)     (115) 
---------------  --------  --------  ------------  ------------  -----------  -------------------  ---------  ----------  ----------------  -------- 
 
 Transactions 
 with owners, 
 recorded 
 directly in 
 equity 
 Contributions 
 by and 
 distributions 
 to owners 
 Final dividend 
  relating 
  to 2010               -         -             -             -            -                    -          -     (1,754)                 -   (1,754) 
 Total 
  contributions 
  by and 
  distributions 
  to owners             -         -             -             -            -                    -          -     (1,754)                 -   (1,754) 
---------------  --------  --------  ------------  ------------  -----------  -------------------  ---------  ----------  ----------------  -------- 
 Balance at 30 
  June 2011           150    21,085         (760)           144           20                  147    (1,097)      11,647               943    32,279 
---------------  --------  --------  ------------  ------------  -----------  -------------------  ---------  ----------  ----------------  -------- 
 

Consolidated Statement of Cash Flows

 
                                                         Six months   Six months 
                                                              ended        ended 
                                                            30 June      30 June 
                                                               2012         2011 
                                                             GBP000       GBP000 
------------------------------------------------------  -----------  ----------- 
 Cash flows from operating activities 
 Interest and similar income received                        22,540       16,445 
 Interest and similar charges paid                          (7,302)      (4,668) 
 Fees and commissions received                               10,603       13,430 
 Net trading and other income                                 9,516          693 
 Cash payments to employees and suppliers                  (29,061)     (23,649) 
 Taxation paid                                                (159)        (866) 
------------------------------------------------------  -----------  ----------- 
 Cash flows from operating profits before changes in 
  operating assets and liabilities                            6,137        1,385 
 Changes in operating assets and liabilities: 
 - net decrease in trading securities                             -        1,308 
 - net decrease in derivative financial instruments           1,959           80 
 - net increase in loans and advances to customers        (156,946)     (57,724) 
 - net decrease in other assets                               2,178          964 
 - net increase/(decrease) in deposits from banks             1,105      (1,682) 
 - net increase in amounts due to customers                   9,861      120,958 
 - net increase in other liabilities                            543        3,288 
------------------------------------------------------  -----------  ----------- 
 Net cash (outflow)/inflow from operating activities      (135,163)       68,577 
------------------------------------------------------  -----------  ----------- 
 Cash flows from investing activities 
 Disposal of financial investments                              567            - 
 Purchase of computer software                                (152)        (260) 
 Purchase of property, plant and equipment                  (1,251)         (66) 
 Proceeds from sale of property, plant and equipment              -           23 
 Purchases of debt securities                              (43,127)    (159,847) 
 Proceeds from redemption of debt securities                 50,449      177,772 
------------------------------------------------------  -----------  ----------- 
 Net cash from investing activities                           6,486       17,622 
------------------------------------------------------  -----------  ----------- 
 Cash flows from financing activities 
 Dividends paid                                             (2,081)      (1,754) 
------------------------------------------------------  -----------  ----------- 
 Net cash used in financing activities                      (2,081)      (1,754) 
------------------------------------------------------  -----------  ----------- 
 Net (decrease)/increase in cash and cash equivalents     (130,758)       84,445 
 Cash and cash equivalents at 1 January                     310,144       85,853 
------------------------------------------------------  -----------  ----------- 
 Cash and cash equivalents at 30 June                       179,386      170,298 
------------------------------------------------------  -----------  ----------- 
 

1. Operating segments

The Group is organised into two main operating segments, arranged over two separate companies with each having its own specialised banking service, as disclosed below:

1) Retail banking - incorporating household cash management, personal lending and banking and insurance services.

2) UK Private banking - incorporating private banking and wealth 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 statement of financial position.

 
                                    Discontinued 
                                      operations                Continuing operations 
                                   -------------  ------------------------------------------------ 
                                                                                   Group 
                                      Investment     Retail   UK Private    (reconciling               Group 
                                         banking    banking      banking          items)     Total     Total 
 Six months ended 30 June 2012            GBP000     GBP000       GBP000          GBP000    GBP000    GBP000 
---------------------------------  -------------  ---------  -----------  --------------  --------  -------- 
 Interest revenue                              -     15,647        6,943             162    22,752 
 Inter-segment revenue                         -       (73)         (79)           (162)     (314) 
---------------------------------  -------------  ---------  -----------  --------------  -------- 
 Interest revenue from external 
  customers                                    -     15,574        6,864               -    22,438 
---------------------------------  -------------  ---------  -----------  --------------  -------- 
 Fee and commission income                     -      5,390        5,467               -    10,857 
---------------------------------  -------------  ---------  -----------  --------------  -------- 
 Revenue from external customers               -     20,964       12,331               -    33,295 
---------------------------------  -------------  ---------  -----------  --------------  -------- 
 
 Interest expense                              -    (4,222)      (2,573)             217   (6,578) 
 Subordinated loan note interest               -          -            -           (262)     (262) 
 Segment operating income                      -     16,815        9,583           (511)    25,887 
 Impairment losses                             -    (3,070)        (609)               -   (3,679) 
 
 Segment profit / (loss) before 
  tax                                      (210)     12,523        1,437         (3,192)    10,768 
 Income tax (expense) / income                 -      (717)            -             584     (133) 
---------------------------------  -------------  ---------  -----------  --------------  --------  -------- 
 Segment profit / (loss) after 
  tax                                      (210)     11,806        1,437         (2,608)    10,635    10,425 
---------------------------------  -------------  ---------  -----------  --------------  --------  -------- 
 
 Segment total assets                          -    342,162      480,438        (32,545)   790,055   790,055 
 Segment total liabilities                     -    312,480      457,346        (35,525)   734,301   734,301 
 Other segment items: 
 Capital expenditure                           -      (975)        (379)            (12)   (1,366)   (1,366) 
 Depreciation and amortisation                 -      (324)        (172)             (8)     (504)     (504) 
---------------------------------  -------------  ---------  -----------  --------------  --------  -------- 
 
 The "Group" segment above includes the parent entity and all intercompany 
  eliminations and fulfils the requirement of IFRS8.28. 
 
 
                              Discontinued 
                                operations                        Continuing operations 
                             -------------  ---------------------------------------------------------------- 
                                                        International                        Group 
                                Investment     Retail         Private   UK Private    (reconciling               Group 
                                   banking    banking         banking      banking          items)     Total     Total 
 Six months ended 30 June           GBP000     GBP000          GBP000       GBP000          GBP000    GBP000    GBP000 
  2011 
---------------------------  -------------  ---------  --------------  -----------  --------------  --------  -------- 
 Interest revenue                        4      9,895               -        6,720             131    16,746 
 Inter-segment revenue                   -       (32)               -         (72)           (135)     (239) 
---------------------------  -------------  ---------  --------------  -----------  --------------  -------- 
 Interest revenue from 
  external 
  customers                              4      9,863               -        6,648             (4)    16,507 
---------------------------  -------------  ---------  --------------  -----------  --------------  -------- 
 Fee and commission income           3,991      5,560               -        4,206               -     9,766 
---------------------------  -------------  ---------  --------------  -----------  --------------  -------- 
 Revenue from external 
  customers                          3,995     15,423               -       10,854             (4)    26,273 
---------------------------  -------------  ---------  --------------  -----------  --------------  -------- 
 
 Interest expense                     (63)    (1,903)            (27)      (2,576)             103   (4,403) 
 Subordinated loan note 
  interest                               -          -               -            -           (270)     (270) 
 Segment operating income            4,025     13,552            (27)        8,187           (247)    21,465 
 Impairment losses                       -    (1,548)               -        (449)               -   (1,997) 
 
 Segment profit / (loss) 
  before tax                       (3,391)      5,020            (20)          983         (2,350)     3,633       242 
 Income tax (expense) / 
  income                               962    (1,222)               -        (133)             235   (1,120) 
---------------------------  -------------  ---------  --------------  -----------  --------------  --------  -------- 
 Segment profit / (loss) 
  after tax                        (2,429)      3,798            (20)          850         (2,115)     2,513        84 
---------------------------  -------------  ---------  --------------  -----------  --------------  --------  -------- 
 
 Segment total assets               12,851    237,473              85      489,170        (53,207)   673,521   686,372 
 Segment total liabilities           9,373    219,538           2,634      465,974        (43,426)   644,720   654,093 
 Other segment items: 
 Capital expenditure                  (10)       (65)               -        (240)            (12)     (317)     (327) 
 Depreciation and 
  amortisation                        (38)      (303)             (5)        (220)             (7)     (535)     (573) 
---------------------------  -------------  ---------  --------------  -----------  --------------  --------  -------- 
 

Segment profit is shown prior to any intra-group eliminations.

Other than the international private banking operations which were in Switzerland, all the Group's other operations are conducted wholly within the United Kingdom and geographical information is therefore not presented.

2. Other income

On 20 March 2012 Arbuthnot Banking Group PLC ("ABG") agreed terms for the sale of Arbuthnot AG. The company was sold to Ducartis Holding AG for a total cash consideration of CHF 2.0m which resulted in a profit for the Group of approximately GBP0.7m, which is recorded in other income. Up to the date of sale, the purchaser funded most of the running costs for this entity. This is also included in other income, and amounted to GBP0.3m.

On 8 June 2012 Secure Trust Bank PLC ("STB") acquired 100% of the shares in Everyday Loans Holdings Limited and its wholly owned subsidiaries Everyday Loans Limited and Everyday Lending Limited (together "EDL"). STB acquired EDL for consideration of GBP1. Upon acquisition STB provided funding so that EDL could redeem the remaining GBP34 million of subordinated debt and also provided a loan facility of GBP37 million to refinance EDL's existing bank debt and to fund future loans. A payment of up to a maximum of GBP1.5 million will be made to the management team of EDL in March 2013, subject to achieving certain performance targets in 2012. Included in other income is a gain on acquisition of GBP8.9m, which arose from fair value adjustments and the recognition of intangibles assets. This is expected to amortise through the profit and loss account over the next 2 to 3 years.

 
                                               Acquired                  Recognised 
                                                 assets          Fair        values 
                                                      /         value            on 
                                            liabilities   adjustments   acquisition 
                                                 GBP000        GBP000        GBP000 
-----------------------------------------  ------------  ------------  ------------ 
 Intangible assets                                   50         5,115         5,165 
 Property, plant and equipment                      491             -           491 
 Loans and advances to customers                 63,720         7,545        71,265 
 Cash at bank                                       991             -           991 
 Other assets                                        24             -            24 
 Prepayments and accrued income                   2,939             -         2,939 
 Deferred tax asset                                   -         5,400         5,400 
                                           ------------  ------------  ------------ 
 Total assets                                    68,215        18,060        86,275 
 
 Loans and debt securities                       71,618             -        71,618 
 Other liabilities                                  960             -           960 
 Accruals and deferred income                     1,741             -         1,741 
 Deferred tax liabilities                             -         3,039         3,039 
                                           ------------  ------------  ------------ 
 Total liabilities                               74,319         3,039        77,358 
 
 Net identifiable (liabilities) / assets        (6,104)        15,021         8,917 
                                           ------------  ------------  ------------ 
 
 Consideration - GBP1                                                             - 
 
 Gain on acquisition                                                          8,917 
-----------------------------------------  ------------  ------------  ------------ 
 

3. Operating expenses

Included in operating expenses are GBP0.5m acquisition costs, GBP0.1m amortisation cost, GBP0.3m management incentive provisions and GBP0.7m normal operating costs relating to EDL. Also included in operating expenses are GBP0.5m increased property costs due to excess floor space after the sale of Arbuthnot Securities and GBP0.3m of unrealised losses on equity securities.

4. Earnings per ordinary share

Basic and fully diluted

Earnings per ordinary share are calculated on the net basis by dividing the profit attributable to equity holders of the Company of GBP7,783,000 (2011: GBP1,259,000) by the weighted average number of ordinary shares 15,279,322 (2011: 14,999,619) in issue during the year. There is no difference between basic and fully diluted earnings per ordinary share.

5. Basis of reporting

The interim financial statements have been prepared on the basis of accounting policies set out in the Group's 2011 statutory accounts as amended by standards and interpretations effective during 2012. The statements were approved by the Board of Directors on 25 July 2012 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, 20 Ropemaker Street, London EC2Y 9AR.

This information is provided by RNS

The company news service from the London Stock Exchange

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