For the six months to end June 2016, the firm reported a profit of £225m, up sharply from the £12.5m reported for the comparable period in 2015. If the £117m gain on the completed sale of Everyday Loans and the £100m on the Secure Trust placing are excluded, the firm made an underlying pre-tax profit of £2m, up from £1.4m in the first half of 2015.
According to Sir Henry Angest, chairman and chief executive of the firm, the two sales mean have positioned the firm well in light of the expected volatility engendered by the UK’s vote to leave the EU.
“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,” he said.
As a result of the placement of part of the firm’s stake in STB, the firm’s holding has fallen from 51.9% to 18.9%, which means it is no longer a fully consolidated subsidiary.
“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 £282m, the equivalent of £18.52 per share,” the firm said.
Within its private banking subsidiary, the firm reported pretax profit of £4.5m, up from £3.7m, with a 14% increase in customer assets to £757m. Deposits rose 23% during the period, while assets under management jumped from £701m in H1 2015, to £797m during the period.