Arbuthnot Banking Group Plc Share Price (ARBB.PL)

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Arbuthnot Banking Group delivered a softer FY25 performance in a challenging macro and interest rate environment, with profitability moderating but balance sheet strength, deposit growth and wealth inflows still positives for the broader investment case. Profit before tax declined to £24.2m (FY24: £35.1m), primarily reflecting lower net interest income as the Bank of England reduced base rates during the year, compressing returns on the Group’s substantial liquidity holdings. Net interest income fell to £118.1m (FY24: £125.9m), while net interest margin declined to 4.7% (FY24: 5.1%). Despite this, the Group continued to demonstrate strong strategic execution. Customer deposits increased 11% to £4.57bn, reflecting the success of its relationship-led private and commercial banking model. In parallel, funds under management and administration (FUMA) grew 21% to £2.68bn, driven by strong net inflows equivalent to over 20% of opening balances. This shift towards deposit gathering and wealth management is strategically important, as it diversifies income streams and supports longer-term franchise value. And performance on both fronts was undoubtedly encouraging. Lending activity, on the other hand, was deliberately constrained, with customer loans declining 6% to £2.25bn as management maintained strict pricing discipline and avoided deploying capital at suboptimal returns amid heightened competition. This conservative stance is consistent with the Group’s long-standing focus on capital preservation and return on equity, particularly ahead of Basel 3.1 regulatory changes, which are expected to increase capital requirements. Balance sheet quality remains a key...

.wealthoracle.co.uk/companies/ARBB