REG - Arbuthnot Banking - Third Quarter 2025 Trading Update

Arbuthnot BankingAnnouncement

Thu 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251023:nRSW4690Ea&default-theme=true

RNS Number : 4690E  Arbuthnot Banking Group PLC  23 October 2025

23 October 2025

Arbuthnot Banking Group PLC

Third Quarter 2025 Trading Update

 

The Board of Arbuthnot Banking Group PLC ("Arbuthnot", the "Company", The
"Bank" or the "Group") provides the following update regarding the trading
performance of the Group for the three months to 30 September 2025.

 

Highlights

 

 ·         Funds under Management and Administration of £2.5bn at the period end (30
           September 2024: £2.0bn) with growth of 24% over the previous 12 months.
 ·         Customer deposit balances of £4.4bn at the period end (30 September 2024:
           £3.8bn); 17% growth over the previous 12 months
 ·         Customer loans and leased assets of £2.3bn at the period end (30 September
           2024: £2.5bn), a 9% decline over the previous 12 months

 

Group Performance

 

The uncertainty being caused by the speculation around the Autumn Budget where
various tax increases are being suggested has dampened sentiment for both
businesses and households, and specifically in the Residential Investment and
Private Equity markets, which are important sources of business for the Group.

 

The uncertain economic outlook has meant that lending markets have continued
to observe thin volumes of business with lenders aggressively competing for
transactions by offering low rates. The Group's counter-cyclical lending
strategy of raising relationship deposits through the Private and Commercial
bank with higher margin lending through its Specialist Lending Subsidiaries
continues and the Group is reluctant to be drawn into competing on price
alone. Instead, we continue to maintain discipline and preserve capital for
the future when markets become firmer, and pricing produces acceptable returns
for our deployed capital.

 

Against this backdrop it is pleasing to report that of the three components
making up the Bank's footings, namely; Loans, Deposits and Funds under
Management and Administration (FUMA), two of them have delivered strong
year-on-year growth. FUMA in particular grew 24% in the 12 months to 30
September 2025 to £2.5bn, driven by strong inflows year to date and
investment portfolio performance following the market turbulence at the
beginning of the year.

 

Following the Supreme Court ruling in August 2025 the Group noted the recent
consultation by the Financial Conduct Authority ("FCA") in regard to
compensation for customers who were unfairly treated as part of their motor
finance agreements. The Group does not and has not provided regulated motor
finance and therefore will not be within scope of any FCA compensation
schemes.

 

Business Division Highlights

 

Banking

Banking's relationship-led approach continued to support the acquisition and
retention of criteria clients across Private and Commercial Banking.

Deposits remained flat over the three months to finish the period with
£4.4bn, a 7% increase from the previous year end and 17% up compared to the
same period in the prior year. However, the proportion of lower priced
relationship-led deposits increased compared to transactional deposits, in
line with the Bank's strategy to grow its Private and Commercial relationship
led deposit proposition.

Lending fell 3% over the quarter and ended the period at £1.4bn, with a 10%
decline year to date and 12% down over the same period for the prior year.
With continuing macro-economic uncertainty, the Bank's appetite for lending
remains cautious, with a focus on continuing to support existing clients,
whilst maintaining its principle of high quality credit lending for new
business.

 

The dislocation in lending markets has resulted in some cases, lenders pricing
asset finance deals at rates as low as 5%, which is the equivalent of
residential lending rates.  The Bank continues to maintain its long-standing
criteria for returns on capital employed and has not been drawn into this
competition.

 

Wealth Management

 

Funds under Management and Administration grew 5% over the three month period,
13% year to date and 24% over the preceding twelve months to finish the period
at £2.5bn. Inflows for the three months to 30 September 2025 were £88m with
year to date gross and net inflows of £362m and £191m respectively.

 

The business remains focused on helping clients plan confidently for the
future through practical strategies to protect family wealth and legacy in the
current uncertain global environment and is standing by to support clients
following the forthcoming Autumn Budget.  The business is progressing well
with its optimisation project which is expected to improve client experiences
and generate internal process efficiencies in 2026.

 

Renaissance Asset Finance ("RAF")

RAF finished the period with a loan book of £280m, maintaining a steady
balance over the period, which equates to year to date growth of 13% and
growth of 16% against the same period in the prior year.

The Block Discounting business continues to grow making up 21% of the total
book with balances of £59m, equating to year to date growth of 35%.

Despite the challenging economic climate for the SME sector, problem debt
provisions remain low and favourable net margins are being maintained.

Arbuthnot Commercial Asset Based Lending ("ACABL")

 

ACABL finished the period with a loan book of £211m, down 7% from the
previous year end. The decline is in part due to the economic uncertainty and
low growth environment along with the cyclical nature of when the business
started, with clients now exiting as a result of business sales and no longer
requiring asset based lending facilities, compounded by pricing pressures from
competitors.  Additionally managed exits of non-performing clients and
business failures, where ACABL has been repaid in full, together with client
facilities reaching the end of their terms have further offset growth in the
loan book. However, watchlist cases which are largely due to financial
underperformance have reduced from their peak earlier this year.

 

The fourth quarter has traditionally been the busiest quarter for new business
for ACABL, however the anticipation of the Autumn Budget coupled with low
economic growth throughout 2025 has resulted in reduced activity for Private
Equity sponsored deals.

 

Asset Alliance Group ("AAG")

 

The commercial vehicle market remained subdued throughout the third quarter.
However after a slow start to the year the Bus and Coach division is now
gathering momentum and showing strong signs of improvement.

 

As at 30 September 2025 the business had assets available for lease and
finance leases totalling £385.0m with growth of 5% since the year end.
However, ongoing competition and rate pressures have resulted in increased
levels of brokered business, which has allowed the business to retain client
relationships albeit whilst generating lower income.

 

Assets sales continued to disappoint in a weak market for secondhand vehicles,
but more recently these have shown signs of improvement with the majority of
vehicles generating profits. We have experienced losses on specific vehicle
models acquired soon after COVID.  This stock has now been reduced, and it is
expected that these will all be sold before the year end.

 

 The Directors of the Company accept responsibility for the contents of this
 announcement.

 The information contained within this announcement is deemed to constitute
 inside information as stipulated under the retained EU law version of the
 Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
 law by virtue of the European Union (Withdrawal) Act 2018. The information is
 disclosed in accordance with the Company's obligations under Article 17 of the
 UK MAR. Upon the publication of this announcement, this inside information is
 now considered to be in the public domain.

ENQUIRIES:

 Arbuthnot Banking Group                                                                                                                                              020 7012 2400
 Sir Henry Angest, Chairman and Chief Executive
 Andrew Salmon, Group Chief Operating Officer
 James Cobb, Group Finance Director

 Grant Thornton UK LLP (Nominated Adviser and AQSE Corporate Adviser)                                                                                                 020 7383 5100
 Colin Aaronson
 Samantha Harrison
 Ciara Donnelly

 Shore Capital                                                                                                                                                        020 7408 4090
 (Broker)
 Daniel Bush
 David Coaten
 Tom Knibbs

 H/Advisors Maitland (Financial PR)                                                                                                                                   020 7379 5151
 Neil Bennett
 Jonathan Cook

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTPKBBKFBDDAKB



            Copyright 2019 Regulatory News Service, all rights reserved