REG - Arbuthnot Banking - Results for the six months to 30 June 2016 <Origin Href="QuoteRef">ARBB.L</Origin> - Part 2
19/07/2016 07:05
- Part 2: For the preceding part double click ID:nRSS5231Ea
intercompany debt of £108.1 million to STB. After selling costs of £6.2m, this
resulted in a gain recognised on disposal of £113.3m.
Details of the profits of discontinued operations, net assets disposed of and
consequential gain recognised on disposal and cash flow from discontinued
operations is set out below.
From 1 January to 13 April Six months ended 30 June
2016 2015
Note £000 £000
Interest income 11,137 19,574
Net interest income 11,137 19,574
Fee and commission income 147 1,086
Fee and commission expense (124) (1,249)
Net fee and commission income 23 (163)
Operating income 11,160 19,411
Net impairment loss on financial assets (2,610) (3,223)
Operating expenses (6,016) (10,608)
Profit before tax 2,534 5,580
Tax expense (507) (1,131)
Profit after tax 2,027 4,449
Profit on sale of business 116,754 -
Total profit from discontinued operation 118,781 4,449
Profit attributable to:
Equity holders of the Company 61,667 2,310
Non-controlling interests 57,114 2,139
Profit after tax 118,781 4,449
Earnings per share for profit attributable to the equity holders of the Company from discontinued operations during the year
(expressed in pence per share):
- basic 5 418.4 15.7
- diluted 5 417.0 15.5
The following unaudited assets were sold as part of the sale of ELL:
Recognised values on sale
2016
£000
Loans and advances to banks 457
Loans and advances to customers 116,744
Property, plant and equipment 452
Intangible assets 1,258
Deferred tax assets 371
Prepayments and accrued income 451
Other assets 11
Total assets 119,744
Intercompany funding 108,088
Current tax liability 3,212
Other liabilities 4,748
Total liabilities 116,048
Net identifiable assets / (liabilities) 3,696
Consideration 123,206
Costs (2,756)
Profit on sale of ELL 116,754
The intercompany funding was repaid by NSF at the time of completion.
Cash flow from discontinued operations - ELL From 1 January to 13 April Six months ended 30 June
2016 2015
£000 £000
Cash flows from operating activities
Interest received 11,137 19,574
Fees and commissions received 23 (163)
Cash payments to employees and suppliers (8,626) (13,831)
Taxation (paid)/received (507) (1,131)
Cash flows from operating profits before changes in operating assets and liabilities 2,027 4,449
Changes in operating assets and liabilities:
- net increase in loans and advances to customers (3,618) (11,427)
- net decrease in other assets (249) 407
- net increase in other liabilities 2,621 5,146
Net cash inflow/(outflow) from operating activities 781 (1,425)
Cash flows from investing activities
Purchase of property, plant and equipment (9) (179)
Net cash from investing activities (9) (179)
Cash flows from financing activities
Increase in borrowings
Dividends paid
Net increase/(decrease) in cash and cash equivalents 772 (1,604)
Cash and cash equivalents at 1 January 1,661 1,623
Cash and cash equivalents at 13 April / 30 June 2,433 19
On 15 June 2016 Arbuthnot Banking Group ('ABG') sold 6 million shares in
Secure Trust Bank PLC ('STB'), which reduced its shareholding in STB from
51.92% to 18.93%. From this date the Group accounted for its remaining
shareholding in STB as an associate. After the sale of the 6 million shares,
the Group retained Board representation and as such is seen to have
significant influence over STB. The profit and cash flow from discontinued
operations relating to ELL have been shown in the tables above. The ELL
entities were subsidiaries of STB and therefore formed part of the STB number
reported in the operating segments of ABG. The tables below therefore reflect
the profit and cash flow from the STB group excluding ELL. The combined
impact can be seen in the operating segments (see note 1 - Retail banking).
From 1 January to 15 June Six months ended 30 June
2016 2015
Note £000 £000
Interest income 57,498 44,588
Interest expense (12,107) (9,769)
Net interest income 45,391 34,819
Fee and commission income 7,981 8,396
Fee and commission expense (779) (386)
Net fee and commission income 7,202 8,010
Operating income 52,593 42,829
Net impairment loss on financial assets (12,172) (7,995)
Operating expenses (29,074) (24,265)
Profit before tax 11,347 10,569
Tax expense (2,198) (2,001)
Profit after tax 9,149 8,568
Profit on sale of shares 100,180 -
Total profit from discontinued operation 109,329 8,568
Profit attributable to:
Equity holders of the Company 105,017 4,516
Non-controlling interests 4,312 4,052
Profit after tax 109,329 8,568
Earnings per share for profit attributable to the equity holders of the Company from discontinued operations during the year
(expressed in pence per share):
- basic 5 712.5 30.6
- diluted 5 710.1 30.2
The following unaudited assets were deconsolidated as part of the sale of 6 million shares in STB:
Recognised values on sale
2016
£000
Cash and balances at central banks 176,647
Loans and advances to banks 27,618
Loans and advances to customers 1,117,700
Other assets 5,805
Financial investments 15,030
Deferred tax asset 606
Intangible assets 7,017
Property, plant and equipment 8,606
Total assets 1,359,029
Deposits from banks 25,000
Deposits from customers 1,046,009
Current tax liability 293
Other liabilities 29,748
Total liabilities 1,101,050
Net identifiable assets 257,979
Profit on sale of shares were calculated as follows:
2016
£000
Consideration received 150,000
Less costs (2,001)
Less net identifiable assets (257,979)
Add back non-controlling interest 124,046
Add back fair value of remaining investment in STB 86,114
Profit on sale of STB 100,180
Cash flow from discontinued operations - STB excluding ELL From 1 January to 15 June Six months ended 30 June
2016 2015
£000 £000
Cash flows from operating activities
Interest received 68,635 44,667
Interest paid (12,107) (9,841)
Fees and commissions received 7,226 7,995
Cash payments to employees and suppliers (51,552) (32,413)
Taxation (paid)/received (6,034) (1,977)
Cash flows from operating profits before changes in operating assets and liabilities 6,168 8,431
Changes in operating assets and liabilities:
- net increase in loans and advances to customers (165,976) (229,688)
- net decrease in other assets 117,395 (661)
- net / in deposits from banks (10,000) 24,285
- net / in amounts due to customers 12,936 226,690
- net increase in other liabilities (5,031) (1,164)
Net cash (outflow)/inflow from operating activities (44,508) 27,893
Cash flows from investing activities
Purchase of computer software (1,754) (433)
Purchase of property, plant and equipment (531) (884)
Disposal of property, plant and equipment 2,179 -
Proceeds from disposal of businesses 106,912 -
Proceeds from sale of property, plant and equipment 456 -
Net cash inflow/(outflow) from investing activities 107,262 (1,317)
Cash flows from financing activities
Increase in borrowings
Dividends paid (10,005) (9,500)
Net cash used in financing activities (10,005) (9,500)
Net increase in cash and cash equivalents 52,749 17,076
Cash and cash equivalents at 1 January 141,595 104,530
Cash and cash equivalents at 15 June / 30 June 194,344 121,606
7. Basis of reporting
The interim financial statements have been prepared on the basis of accounting
policies set out in the Group's 2015 statutory accounts as amended by
standards and interpretations effective during 2016 and in accordance with IAS
34 "Interim Financial Reporting" (except for comparatives in the statement of
financial position). The directors do not consider the fair value of the
assets and liabilities presented in these financial statements to be
materially different from their carrying value.
The statements were approved by the Board of Directors on 18 July 2016 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, 7 Wilson Street, London EC2M 2SN.
This information is provided by RNS
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