Slide 1: 2018 Year-end Results
ARBUTHNOT BANKING GROUP PLC 2018 Year-end Results 28 March 2019
Slide 2: 2018 Year-end results
2018 Year-end results Highlights Group Overview Financials Business Update PAGE 2
Slide 3: Highlights
Highlights • Profit Before Tax £6.8m (2017 £2.5m) • Underlying Profit £7.4m (2017 £3.2m) • Client loan balances up 17% • Total Dividend 35p (2017: 33p) up 5% • Bonus share issue of 1 for 100 to create Non-Voting Shares, to be listed on NEX Growth Exchange* • Successfully launched New Ventures – Asse
Slide 4: 2018 Year-end results: Group Overview
2018 Year-end results Highlights Group Overview Financials Business Update PAGE 4
Slide 5: 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 15.53% sharehold
Slide 6: Group Structure
Group Structure Arbuthnot Banking Group PLC 100% 8.8% 6.8% Private Banking Commercial Banking New Business Areas Provides traditional private banking Provides bespoke commercial banking Direct to depositors savings services to over 4,200 clients, as well as services to over 1,600 clients and platfor
Slide 7: Substantial Track Record Of Value Creation
Substantial Track Record Of Value Creation Overview Share Price Performance • Market capitalisation of £192 million1 • Consistent dividend track record returning £4.95 to shareholders since 2014 • Continued growth in dividend – final dividend of 20p, a 5% increase supported by improved profitability
Slide 8: Arbuthnot Banking Group Profile
Arbuthnot Banking Group Profile Deposits • Specialist UK bank providing services to both its private and commercial banking clients • Listed since 1988 and moved to AIM in 2005 (ARBB:LN). Announced plans to dual list on NEX Exchange expected on 17 May 2019 Loans • Excels in providing bespoke financi
Slide 9: 2018 Year-end results: Financials
2018 Year-end results Highlights Group Overview Financials Business Update PAGE 9
Slide 10: Summary Financials – Income Statement
Summary Financials – Income Statement in £ millions 2013 2014 2015 2016 2017 2018 Net interest income 12.2 18.9 24.8 30.4 41.1 55.2 Net fee and commission income 8.9 9.5 9.8 11.0 13.5 12.7 Operating income 21.0 28.4 34.6 41.5 54.6 67.9 Other income 1.2 - - 3.2 3.0 6.6 1 Gain on sale of building 6.5
Slide 11: Summary Financials – Divisional Performance
Summary Financials – Divisional Performance 2018 2013 2014 2015 2016 2017 2018 in £ millions Change Arbuthnot Latham 7.7** 3.6 6.0 9.1 11.0 14.6 32% Group Centre (9.2) (7.4) (8.6) (11.0) (8.5) (7.8) (7%) (Loss) / Profit before tax (1.5) (3.8) (2.6) (1.9) 2.5 6.8 Tax 0.6 0.2 0.1 (0.7) (0.4) (1.1) (Lo
Slide 12: Summary Financials – Operating Segments
Summary Financials – Operating Segments in £ millions 2017 2018 Private Banking 7.9 5.8 Commercial Banking (2.1) 2.5 RAF 1.5 1.9 All other Divisions 3.7 4.4 Group Centre (8.5) (7.8) (Loss) / Profit before tax 2.5 6.8 Tax (0.4) (1.1) (Loss) / Profit after tax 2.1 5.7 Profit / (loss) from discontinued
Slide 13: Summary Financials – Underlying Profit
Summary Financials – Underlying Profit in £ millions 2017 2018 Profit before tax 2.5 6.8 AL investment in operating systems 0.1 - AL acquisition costs 0.1 - RAF full year equivalent income* 0.5 - AL cost of establishing new ventures - 1.6 STB dividend income full year at current shareholding - 1.6 R
Slide 14: Summary Financials – Balance Sheet
Summary Financials – Balance Sheet in £ millions 2013 2014 2015 2016 2017 2018 Assets Cash & balances at central banks 193.0 115.9 368.6 195.8 313.1 405.3 Customer loans1 341.0 536.5 618.9 758.8 1,049.3 1,224.7 Other assets 167.8 171.7 283.4 310.7 490.8 545.2 Total assets 701.8 824.1 1,270.9 1,265.3
Slide 15: Loan Portfolio Analysis
Loan Portfolio Analysis Key Metrics Total Loans and Avg. Rates Net Interest Margin (Avg.) • £1,225m of loans split 55%/36%/7%/2% between Private, Commercial, RAF and Other • £697k average loan amount • 98.2% secured at an average LTV of 54% • Average loan rate of 5.2% • Net interest margin of 4.7% L
Slide 16: Asset Quality
Asset Quality Overview Non-Performing Loans / Stage 3 • Legacy loan book originated before the financial crisis has largely been run-off • Lending strategy refined to reduce risk eg. lending against overseas properties and yachts have been precluded • Lending is almost entirely secured on UK residen
Slide 17: 2018 Year-end results: Business Update
2018 Year-end results Highlights Group Overview Financials Business Update PAGE 17
Slide 18: 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 quoted on London Group reduces Helens Stock Exchange shareholding in STB from 51.9% to 18.9% and raises £150 million 1833 1960 1985 2005 2011 2012 2016 2018
Slide 19: 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 20: Private Banking Overview
Private Banking Overview Overview Interest Income vs. Interest Expense • Private Banking – Comprises current accounts, deposit accounts, loans, overdrafts and foreign exchange • Financial Planning – Independent and fee based (not commission), covering estate and tax planning, pensions and wealth pre
Slide 21: Commercial Banking Overview
Commercial Banking Overview Overview Breakout of Income Launched in 2015, • 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 enable fund
Slide 22: RAF Overview
RAF Overview RAF Loan Book Growth • In April 2017, Arbuthnot Latham acquired specialist lender Renaissance Asset Finance which had a client loan book of £56 million at that date • RAF specialises in offering financing solutions mainly to high net worth individuals and businesses seeking to purchase
Slide 23: New Business Lines
New Business Lines Asset Based Lending • Launched in May 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 experience in the sector • Credit oversight from core Arbuthnot t
Slide 24: Arbuthnot Direct
Arbuthnot Direct • Arbuthnot Direct launched on 21 February 2019 • Arbuthnot Direct allows access to the direct savings market which will give Arbuthnot Latham the ability to raise deposits in a short space of time • This allows the bank to react to business opportunities in the knowledge that it ca
Slide 25: Business & Technology Transformation
Business & Technology Transformation Arbuthnot Direct Product & Proposition launch • Arbuthnot Direct was successfully launched to customers in Feb 2019 • A new product offering competitive 3 and 5 year fixed term deposits • Fast, simple, end to end online application • Access to the direct savings
Slide 26: Disclaimer
Disclaimer This document is a summary only of certain information contained in the announcement dated 28 March 2019 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 27: 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 www.arbuthnotgrou