22nd Jul 2014 10:16
LONDON (Alliance News) - AIM-listed Arbuthnot Banking Group PLC, the holding company for private bank Arbuthnot Latham & Co Ltd and retail bank Secure Trust Bank PLC, Tuesday said its interim pretax profit almost quintupled, boosted by customer loan growth in both divisions.
In a statement, Arbuthnot reported a GBP9.5 million pretax profit in the six months ended June 30, compared with GBP2.0 million in the corresponding period a year earlier. Net interest income from lending, deposit-taking and money market activities, less interest expenses, increased to GBP41.1 million from GBP30.1 million.
Net fee and commission income, derived from fees for services provided to customers and clients and commission earned on the sale of financial instruments and products, increased to GBP16.1 million from GBP13.1 million. Net impairment losses on financial assets contracted to GBP7.5 million from GBP8.2 million, while operating expenses rose to GBP40.2 million from GBP33.9 million.
Overall, loans made to customers increased to GBP842.0 million from GBP673.0 million. Customer deposits rose to GBP1.07 billion from GBP840.0 million. This was thanks to increases in both units.
Earlier this month Arbuthnot completed the sale of 1.0 million of its shares in Secure Trust at GBP24.00 each to institutional investors, in conjunction with the sale of 2.1 million new shares in Secure Trust at the same price, which raised about GBP50.0 million for the retail bank's growth and GBP25 million for Arbuthnot. The two share sales together reduced the group's stake in the retail bank to 53% from 67%.
"The group has made good progress and following the successful raising of GBP75.0 million of new capital is well placed to pursue the opportunities that exist in the banking industry," Arbuthnot Chairman and Chief Executive Henry Angest said in a statement.
The chairman said that the group is confident of taking advantage of new opportunities in the UK banking sector, as the larger competitors have been deleveraging as regulators up the ante in order to make banks safer and better prepare them for financial troubles.
Secure Trust, which said that its growth and the increase in its free float to 47% in the wake of the share sale positions it well for a promotion to the main market from AIM, reported a GBP11.4 million pretax profit, compared with GBP6.2 million in the corresponding period a year earlier.
"The performance and continued growth of our consumer finance portfolios is encouraging, and the recent successful completion of a substantial capital raise means we can now diversify into [small and medium sized enterprise] lending activities in a meaningful way, building on the expertise and experience that the bank has in this sector," Secure Trust Chief Executive Paul Lynam said in a statement.
"We have continued to position the bank to capitalise on the significant opportunities available to it, in a controlled and prudent manner, and we look forward to the future with confidence," Lynam added.
Arbuthnot maintained its interim dividend at 11 pence per share. Secure Trust increased its interim dividend by 1p to 16p.
Arbuthnot shares were Tuesday quoted up 2.1% at 1,205.00 pence, while Secure Trust shares were up 0.9% at 2,305.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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