Arbuthnot Banking Group Plc · LSE:ARBB
Arbuthnot Banking — FY2017 Earnings Presentation
23 slides from Arbuthnot Banking's earnings presentation, Mar 28, 2018
Slide 1: Arbuthnot Banking Group PLC 2017 Year-end Results
ARBUTHNOT BANKING GROUP PLC 2017 Year-end Results 28 March 2018
Slide 2: 2017 Year-end results
2017 Year-end results Group Overview Financials Business Update PAGE 2
Slide 3: Arbuthnot Banking Group PLC
Arbuthnot Banking Group PLC One of the oldest specialist banks in the UK, having served our clients since 1833 Well capitalised with strong liquidity from its deposit- based funding model Track record of developing profitable businesses, including Secure Trust Bank where we retain a 18.6% shareholdi
Slide 4: Group Structure
Group Structure Arbuthnot Banking Group PLC 100% 18.6% Private Banking Commercial Banking New Business Areas Provides traditional private banking Provides bespoke commercial banking Soon to launch direct to depositors services to over 4,500 clients, as well as services to over 700 clients and provid
Slide 5: Substantial Track Record Of Value Creation
Substantial Track Record Of Value Creation Overview Relative Share Price Performance • Market capitalisation of £205 million1 400% 350% • Consistently provided shareholders with interim and year-end 300% dividends 250% • Over the past seven years, net assets per share have risen almost 200% 150% sev
Slide 6: Arbuthnot Banking Group Profile
Arbuthnot Banking Group Profile Deposits • Specialist UK bank providing services to both its private £1,391m Private Commercial and commercial banking clients £998m £897m £521m £586m • Listed since 1988 and moved to AIM in 2005 (ARBB:LN), with a common equity market capitalisation of £205 million1 2
Slide 7: 2017 Year-end results
2017 Year-end results Group Overview Financials Business Update PAGE 7
Slide 8: Summary Financials – Income Statement
Summary Financials – Income Statement in£ millions 2013 2014 2015 2016 2017 Net interest income 12.2 18.9 24.8 30.4 41.1 Net fee and commission income 8.9 9.5 9.8 11.0 13.5 Operating income 21.0 28.4 34.6 41.5 54.6 Other income 1.2 - - 3.2 3.0 Gain on sale of building 6.5 - - - - Profit from associa
Slide 9: Summary Financials – Divisional Performance
Summary Financials – Divisional Performance 2017 2013 2014 2015 2016 2017 in£ millions Change Arbuthnot Latham - Private and Commercial Banking 7.7** 3.6 6.0 9.1 11.0 21% Secure Trust Bank* - Retail Banking Associate Income - 2.1 4.4 105% Group Center (9.2) (7.4) (8.6) (11.0) (8.4) (24%) Profit Befo
Slide 10: Summary Financials – Balance Sheet Extract
Summary Financials – Balance Sheet Extract 2013 2014 2015 2016 2017 in£ millions Assets Cash & balances at central banks 193.0 115.9 368.6 195.8 313.1 Customer loans* 341.0 536.5 618.9 758.8 1,049.3 Other assets 167.8 171.7 283.4 310.7 490.8 Total assets 701.8 824.1 1,270.9 1,265.3 1,853.2 Liabiliti
Slide 11: Loan Portfolio Analysis
Loan Portfolio Analysis Key Metrics Total Loans and Avg. Rates Net Interest Margin (Avg.) • £1,049m of loans split 64%/29%/7% £1,800m 6.2% 4.83% between Private, Commercial and RAF £1,600m 5.5% 5.7% 5.6% 6.0% 5.3% 4.76% 4.75% • £987k average loan amount £1,400m 5.5% £1,200m £1,049m 5.0% • 99.3% secu
Slide 12: Asset Quality
Asset Quality Overview Non-Performing Loans 3.7% £50.0m 4.0% 3.2% 3.1% 3.0% • Legacy loan book originated before the financial crisis has £45.0m 3.0% £40.0m largely been run-off 2.2% £35.0m 2.0% £30.0m £31.0m • Lending strategy continuously refined to reduce risk eg. £25.0m 1.0% lending against yach
Slide 13: 2017 Year-end results
2017 Year-end results Group Overview Financials Business Update PAGE 13
Slide 14: History Of Arbuthnot Banking Group PLC
History Of Arbuthnot Banking Group PLC Arbuthnot & Latham MBO of Secure Homes Secure Trust Bank Arbuthnot Banking Formed at Great St completed (STB) quoted on Group reduces Helens London Stock shareholding in STB Exchange from 51.9% to 18.9% and raises £150 million 1833 1960 1985 2005 2011 2012 2016
Slide 15: History Of Arbuthnot Banking Group PLC
History Of Arbuthnot Banking Group PLC Complete the purchase of RAF1 Establish Decision taken IPO of Secure Acquire V12 Launch commercial to stop Trust Bank on point of sale commercial property fund unsecured AIM at £7.20 finance business banking lending business Implement new Oracle banking platfor
Slide 16: Private Banking Overview
Private Banking Overview Overview Interest Income vs. Interest Expense £37m £37m • Private Banking – Comprises current accounts, deposit £33m accounts, loans, overdrafts and foreign exchange £24m • Financial Planning – Independent and fee based (not £20m commission), covering estate and tax planning
Slide 17: Commercial Banking Overview
Commercial Banking Overview Overview Breakout of Income Launched in 2015 £6,149k • Banking – Comprising current accounts, deposits, overdrafts, guarantees and charge cards. Clients have a dedicated banker who is key to managing the relationship • Property Finance – Comprises tailored lending to enab
Slide 18: RAF Overview
RAF Overview RAF Loan Book Growth £71.3m Prior to acquisition Post-acquisition • In April 2017, Arbuthnot Latham acquired specialist lender Renaissance Asset Finance (RAF) which had a client loan book of £58 million at that date £58m £55.4m • RAF specialises in offering financing solutions mainly to
Slide 19: New Business Lines
New Business Lines Asset Based Lending • Currently in set-up phase and expecting to be launched towards the end of Q2 2018 • Asset based lending team of seven previously managed a similar business in Shawbrook and prior to that Centric Commercial Finance. The combined team has over 100 years of expe
Slide 20: Arbuthnot Direct
Arbuthnot Direct • Access to the direct savings market will give Arbuthnot Latham the ability to raise deposits in a short space of time • This will allow the bank to react to business opportunities in the knowledge that it can participate in a deal process with the ability to access this source of
Slide 21: Technology and Systems
Technology and Systems Flexcube internal transfer screen Client online banking screen • Significant investment in internal operating systems to provide a robust and scalable platform to support growth for many years to come – In May 2017, Arbuthnot Latham’s new platform “Flexcube”, developed by Orac
Slide 22: Disclaimer
Disclaimer This document is a summary only of certain information contained in the announcement dated 28 March 2018 and should be read in conjunction with the full text of the announcement. This document contains forward looking statements with respect to the business, strategy and plans of the Arbu
Slide 23: Thank You
ARBUTHNOT BANKING GROUP PLC Thank You Arbuthnot Banking Group: 0207 012 2400 Arbuthnot Banking Group PLC Arbuthnot House Sir Henry Angest – Chairman and Chief Executive 7 Wilson Street Andrew Salmon – Group Chief Operating Officer London EC2M 2SN James Cobb – Group Finance Director Ian Henderson – G
Arbuthnot Banking Group — FY2017 Earnings Presentation on 6ix