Hardman & Co Research: Arbuthnot Banking Group (ARBB): Mortgage portfolio acquisitions

Hardman & Co Research: Mortgage portfolio acquisitions

On 3 July, ABG announced the acquisition of two mortgage portfolios for £258m (£6m discount to book value). The overall yield on the portfolios is 3.6%, before accounting for the negotiated purchase discount effect. The credit profile is excellent (average loan to value sub-70% and 75% of the loans originated before 2008). 85% of the loans are owner-occupied, with the balance buy-to-let. The loans are of sufficient quality to be included in the pool of assets used by ABG as collateral for the Sterling Monetary Framework at the Bank of England, and so be included in its liquidity resources. ABG's record on such acquisitions has been good. We will review numbers with the results on 17 July.Please click here for the full report:

https://www.hardmanandco.com/research/corporate-research/mortgage-portfolio-acquisitions/

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