Arbuthnot Banking - Annual General Meeting 2023 Trading Update
Announcement provided byArbuthnot Banking Group PLC · ARBB
Arbuthnot Banking Group PLC
Annual General Meeting 2023 Trading Update
The Board of Arbuthnot Banking Group PLC ("Arbuthnot", "the Company", "the Bank" or "the Group") is pleased to make the following statement regarding the trading performance of the Group for the four months to 30 April 2023 ahead of the Annual General Meeting due to be held later today.
· The Group continues to benefit from the business model it has established over many years, whereby the return of a higher Bank of
· BoE Base Rate rises continue to contribute to increased revenue, with deposit costs due to increase over time.
· Loan Balances including Leased Assets at 30 April 2023 of
· Deposits of
· Assets Under Management ("AUM") of
Since the end of 2022, the Bank of England Base Rate has had three further rate increases, from 3.50% at the year end to 4.50% currently. As previously reported, the Group benefits from Base Rate rises immediately as its treasury assets and the majority of its loan book are referenced to the BoE Base Rate. In response the Group has also increased its deposit pricing. However, the blend of call, current, time and notice accounts mean the increase in the cost of deposits lags behind that of the revenue generated from the Group's assets. Deposit balances have continued to grow with a net inflow of
As expected, loan book growth for the 4 months to end of April was lower than previous periods, as the Group endeavoured to tighten its credit criteria whilst demand for lending post-pandemic has been suppressed by rising inflation and the financial impact of the war in
The Group was pleased to announce in April 2023 that it had raised
The Board believes that the successful capital raise also demonstrates shareholders' confidence in the Group's business model and core principles of lending against high quality security whilst maintaining high levels of liquidity.
Against the backdrop of ongoing economic uncertainty, the Bank has continued to stay focused on client service, which has led to growth in client acquisition for both deposits and lending in the first four months of 2023.
The Bank's long term approach and cautious banking model resonates well with criteria clients looking for a bank where they can build a long term relationship.
Lending increased marginally by
Total AUMs have increased 4% for the first four months of 2023 to
Arbuthnot Commercial Asset Based Lending ("ACABL")
In early May, ACABL celebrated its 5th year anniversary. Since launch, the business has grown its loan book with facility limits in excess of
Demand for ACABL products slowed towards the end of 2022 which has carried over into early 2023, with fewer corporate finance transactions proposed due to ongoing market challenges. The business has been introduced to, but declined, an increased number of refinancing opportunities due to a more cautious approach being taken in the current market. Funds in use finished the period at
In the first quarter ACABL renewed its accreditation to provide Recovery Loan Scheme loans as a continued additional source of funding for deal structures where appropriate.
Renaissance Asset Finance ("RAF")
RAF finished the period with a loan book of
New business levels have remained positive and the balance sheet continues to grow in line with the new Future State plan, with improved margins achieved on new business despite the current economic environment.
Whilst some pressure is expected, particularly in the SME customer base, the book continues to perform in the current economic climate with problem debts marginally lower than expected.
Asset Alliance Group ("AAG")
AAG continues to trade well with Assets Available to Lease of
Supply chain issues, although slowly resolving, continue to be a headwind although it is expected that these issues will improve in the near term. Where in prior periods, supply chain issues have led to a buoyant used truck market, the business expects this market to weaken, but margins currently remain stronger than expected.
AAG has agreed terms to purchase
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 "
Arbuthnot Banking Group
Sir Henry Angest, Chairman and Chief Executive
Andrew Salmon, Group Chief Operating Officer
James Cobb, Group Finance Director
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