19th Jul 2016 07:22
LONDON (Alliance News) - Lenders Secure Trust Bank PLC and Arbuthnot Banking Group PLC on Tuesday both reported one-off surges in profit for the first half thanks to disposals, while delivering solid underlying results as well.
At the end of May, Arbuthnot announced the sale of a 33% stake in Secure Trust via a placing. This resulted in a fundamental change in Arbuthnot's business under AIM rules, and the group said it would use the proceeds from the placing to accelerate its own growth, including the private and commercial banking business within its Arbuthnot Latham & Co unit, in addition to developing further business opportunities over time.
Secure Trust said it would move to the London Main Market following the sale of Arbuthnot's stake.
On Tuesday, Arbuthnot said it made a GBP225.0 million profit in the half to the end of June, driven by the GBP100.0 million gain made on the sale of the stake in Secure Trust and a GBP117.0 million gain it made on the sale of Everyday Loans, which it sold to UK-listed sub-prime lender Non-Standard Finance PLC.
Underlying pretax profit for the half at Arbuthnot was GBP2.0 million, up from GBP1.4 million a year earlier. Arbuthnot said customer loans grew to GBP657.0 million from GBP584.0 million year-on-year in the half, while customer deposits grew to GBP940.0 million from GBP770.0 million.
Assets under management for Arbuthnot increased to GBP797.0 million from GBP701.0 million.
Arbuthnot said it will pay an interim dividend of 13.0 pence, up from 12.0p a year earlier, in addition to an already declared special dividend of 25.0p. The special dividend is being paid from the gains made on the Everyday Loans sale.
"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," said Henry Angest, chairman and chief executive of Arbuthnot.
The Everyday Loans sale also significantly benefited Secure Trust's reported profit, jumping to GBP129.1 million from GBP12.9 million. Underlying pretax profit for the half to the end of June was GBP17.4 million, up 54% from GBP11.3 million a year earlier.
Secure Trust said customer deposits increased 25% year-on-year to GBP1.04 billion, while total customer numbers grew 35% year-on-year. The group's overall loan book stood at GBP1.13 billion at the end of the half, up 51% year-on-year.
Secure Trust said it will pay a flat interim dividend of 17.0p, in addition to the 165.0p dividend it will pay on gains made from the Everyday Loans sale.
"I am pleased with the outstanding progress Secure Trust Bank has made in the first six months of 2016," said Secure Trust Chief Executive Paul Lynam. He added the lender "is now well positioned to carefully navigate the evolving post Brexit economic environment and to pursue our strategic priorities."
Arbuthnot shares were up 4.9% to 1,468.80p early Tuesday, while Secure Trust shares were up 2.7% to 1,950.00p.
By Sam Unsted; [email protected]; @SamUAtAlliance
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