Arbuthnot claims solid quarter as it takes on more bankers

Arbuthnot Banking Group issued an update of trading for the three months to 30 September on Thursday, claiming it continued to trade well during the quarter.

The AIM-traded firm said its overall lending pipeline showed good growth, although the period of time between approval and drawdown of loans marginally increased.

Its commercial bank division continued to develop at a “good rate”, the board said.

“The disruption in the larger UK banks has led to a number of direct approaches from experienced bankers who are interested in the potential that a well-established banking brand like Arbuthnot Latham can offer commercial banking clients.

“Accordingly, we have accelerated our expansion plans and are taking on new premises in Manchester to cover the North West and expect to have a further six commercial bankers in place by early 2017.”

Arbuthnot said the recent reduction in the base rate will result in a short term fall in Arbuthnot Latham's net interest margin, but the longer term impact may be reduced depending on where rates in the deposit market stabilise.

“The significant transactions carried out by ABG in the first half of the year which resulted in a first half profit of over £225m have now been included in the capital base of the group.

“As a result of this, the board [is] proposing to pay a further special dividend of £3 per share, which equates to approximately £45m,” it said.

“This will be paid on 18 November 2016 to shareholders on the register on 21 October 2016.”

Overall, the board said it remained confident that it can continue to exploit opportunities in the financial services industry, and further develop and diversify the group by deploying surplus capital in a “considered manner”.