Arbuthnot Banking Group Plc · LSE:ARBB
Arbuthnot Banking — FY2019 Earnings Presentation
25 slides from Arbuthnot Banking's earnings presentation, Mar 26, 2020
Slide 1: 2019 Year-end Results
Arbuthnot Banking Group PLC 2019 Year end Results ARBUTHNOT BANKING GROUP PLC 2019 Year-end Results 26 March 2020 Bank of the Year CityAM Awards 2019
Slide 2: Highlights
Arbuthnot Banking Group PLC 2019 Year end Results Highlights Strategy & group overview Financial review Appendix 2
Slide 3: Key Messages
Arbuthnot Banking Group PLC 2019 Year end Results Key Messages Financial Key Indicators • Strong performance from new lending businesses drove a 32% increase • Gross yield of 5.2% in underlying profit before tax in FY19, to £5.8m (FY18: £4.4m) • Cost of funding remained low at 0.69% • Period-end loa
Slide 4: Financial Highlights and KPIs
Arbuthnot Banking Group PLC 2019 Year end Results Financial Highlights and KPIs Key Performance Indicator FY19 FY18 % Change Commentary Net revenue margin 4.5% 4.7% (4%) • Net margin reduction to 4.5% driven by H2 Total cost income ratio 97% 96% 1% increase in cost of funding Underlying PBT £5.8m £4
Slide 5: Strategy & group overview
Arbuthnot Banking Group PLC 2019 Year end Results Highlights Strategy & group overview Financial review Appendix 5
Slide 6: Group Strategic Overview
Arbuthnot Banking Group PLC 2019 Year end Results Group Strategic Overview Business model Relationship led Transactional Banking Core banking Investment Management Higher rate lending deposits Wealth Planning Cost of funding Gross interest yield (FY19) (FY19) 0.69% 5.2% 6
Slide 7: Private Banking Overview
Arbuthnot Banking Group PLC 2019 Year end Results Private Banking Overview Overview of the business Loan book growth and gross interest yield Banking Private Bank since 1833, focussed on low risk sustainable growth. £620m Loan book Gross Interest Yield 7.0% Provide a high quality private banking ser
Slide 8: Commercial Banking Overview
Arbuthnot Banking Group PLC 2019 Year end Results Commercial Banking Overview Overview of the business Loan book growth and gross interest yield Banking Founded in 2015. Provide a high quality banking service to our clients, typically owner managed, independent businesses. Sector Current accounts, d
Slide 9: Renaissance Asset Finance (RAF)
Arbuthnot Banking Group PLC 2019 Year end Results Renaissance Asset Finance (RAF) Overview of the business RAF Loan book growth A specialist asset finance provider, Acquired in April 2017, the subsidiary is based in Basildon with a making funding facilities available, both sales team giving UK wide
Slide 10: Arbuthnot Commercial Asset Based Lending (ACABL)
Arbuthnot Banking Group PLC 2019 Year end Results Arbuthnot Commercial Asset Based Lending (ACABL) Overview of the business ACABL Loan book growth & gross interest yield Full asset based lending facilities (invoice Management team formed in January 2018 with 60+ years of discounting, stock finance,
Slide 11: Arbuthnot Specialist Finance Limited (ASFL)
Arbuthnot Banking Group PLC 2019 Year end Results Arbuthnot Specialist Finance Limited (ASFL) Overview of the business Business Model / Strategy ASFL acts as a specialist lender operating in the niche markets Short term lending secured against properties in England, Wales Arbuthnot Specialist Financ
Slide 12: Financial review
Arbuthnot Banking Group PLC 2019 Year end Results Highlights Strategy & group overview Financial review Appendix 12
Slide 13: Summarised Income Statement & Balance Sheet
Arbuthnot Banking Group PLC 2019 Year end Results Summarised Income Statement & Balance Sheet Income statement (£m) Commentary Financial Year 2019 Financial Year 2018 % Change Interest income 76.87 65.29 18% • Interest income up 18% due to loan balance Interest expense (18.23) (10.11) 80% growth Net
Slide 14: Profit Before Tax Progression in FY19
Arbuthnot Banking Group PLC 2019 Year end Results Profit Before Tax Progression in FY19 10,000 3,690 Commentary 2,465 9,000 • 2019 PBT £7.0m, up from £6.8m in 2018 4,311 • RAF deferred consideration release [£2.6m in 945 8,000 2018, £1.5m in 2019] 6,780 1,264 7,011 • Higher revenue due to the acquis
Slide 15: Summary Financials - Operating Segments
Arbuthnot Banking Group PLC 2019 Year end Results Summary Financials - Operating Segments Financial Year 2019 Financial Year 2018 % Change Commentary Private Banking £2.94m £4.61m (36%) • Private Banking lower due to loan balances Commercial Banking falling and lower loan yields £7.27m £2.80m 160% •
Slide 16: Loan Portfolio Analysis - key metrics
Arbuthnot Banking Group PLC 2019 Year end Results Loan Portfolio Analysis - key metrics £357k Average loan amount 88% secured at an average 52% LTV average for the 46% LTV norm - a maximum LTV of 46% Core property book 70% LTV permitted 5.2% Gross interest yield in 4.5% Net interest margin 1.7% Non-
Slide 17: Loan Book Development in 2019
Arbuthnot Banking Group PLC 2019 Year end Results Loan Book Development in 2019 Increase of £374m (31%) year on year Private Banking Commercial Banking Mortgage Portfolios RAF ACABL ASFL Commentary 1,800 • £265m Mortgage Portfolio acquisition 1,600 • Strong performance from Commercial bank 1,400 and
Slide 18: Customer Deposit Analysis - key metrics
Arbuthnot Banking Group PLC 2019 Year end Results Customer Deposit Analysis - key metrics 15.1 Month 0.78% Average 0.69% FY19 cost £804m Notice £195m Call and £2,085m Average term deposit interest of funding and Time inflows Current Net Flow Customer (original) rate deposits at 31 December 2019 Brea
Slide 19: Capital Surplus
Arbuthnot Banking Group PLC 2019 Year end Results Capital Surplus 80 23.6 Commentary 8.6 • Total capital position at year end of £214.5m, 70 5.4 with surplus capital of £59.8m 13.6 • CET1 capital ratio at the period end of 14.4% 6.5 3.5 59.8 • 2018 retained earnings £5.5m 60 2.4 1.2 • Tier 2 subordi
Slide 20: Group Summary
Arbuthnot Banking Group PLC 2019 Year end Results Group Summary One of the oldest specialist banks in the UK, having served our clients since 1833 Well capitalised with strong liquidity and low cost of funding from a deposit-based funding model Established Private and Commercial Bank and expanding i
Slide 21: Appendix
Arbuthnot Banking Group PLC 2019 Year end Results Highlights Strategy & group overview Financial review Appendix 21
Slide 22: Substantial Track Record of Value Creation
Arbuthnot Banking Group PLC 2019 Year end Results Substantial Track Record of Value Creation Overview Share Price Performance & TSR 3000 ̵ Market capitalisation of £111 million1 ̵ Consistent dividend track record, returning 2500 £73.9m cumulatively to shareholders since 2014 2000 ̵ Continued growth
Slide 23: History of Arbuthnot Banking Group
Arbuthnot Banking Group PLC 2019 Year end Results History of Arbuthnot Banking Group Arbuthnot & Launch Acquire Dunfermline Arbuthnot Banking Group Launch ACABL2 Latham formed at motor finance Residential mortgage reduces shareholding in Launch Arbuthnot Direct Great St Helen's portfolio STB from 51
Slide 24: Disclaimer
Arbuthnot Banking Group PLC 2019 Year end Results Disclaimer This presentation and the information, statements and opinions in it do not constitute, and should not be construed as, a public offer under any applicable legislation or an offer to sell or issue or solicitation of an offer to buy or subs
Slide 25: Thank You
Arbuthnot Banking Group PLC 2019 Year end Results ARBUTHNOT BANKING GROUP PLC Thank You Arbuthnot Banking Group PLC Arbuthnot House 7 Wilson Street Arbuthnot Banking Group: 0207 012 2400 London EC2M 2SN Sir Henry Angest – Chairman and Chief Executive www.arbuthnotgroup.com Andrew Salmon – Group Chie
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