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LONDON (Alliance News) - Arbuthnot Banking Group PLC on Thursday said it expects to pay a special dividend following the sale of Everyday Loans and said pretax profit increased in 2015, while Secure Trust Bank PLC delivered a similarly impressive rise in profit and will also make a special payout.
Arbuthnot said pretax profit increased to GBP34.2 million in 2015 from GBP22.5 million in 2014, including the results of the now-sold Everyday Loans business. Stripping that out, pretax profit on its continuing operations rose to GBP22.6 million from GBP13.9 million.
Arbuthnot will pay a 25.0 pence special dividend upon completion of the Everyday Loans sale to Non-Standard Finance PLC, which acquired the business for GBP235.0 million from Secure Trust Bank, in which Arbuthnot owns a 51.9% stake.
Arbuthnot will make a GBP115.0 million gain on the Everyday Loans sale through its stake in Secure Trust Bank.
The special dividend will be in addition to a final dividend of 17.0p from Arbuthnot, up from 16.0p, which will take its total ordinary payout to 29.0p, up 7.0% from 27.0p in 2014.
Arbuthnot's operating income rose to GBP126.7 million in 2015, up 38% from GBP92.0 million in 2014, helped by its customer lending volumes hitting GBP1.6 billion, a 33% rise on the GBP1.2 billion lent a year earlier.
Private banking loans grew 15% in the year, with customer deposits in the private bank increasing 53%. Assets under management for the private bank grew 11% to GBP739.0 million at the end of the December, from GBP666.0 million a the year before.
In retail banking, Arbuthnot's customer lending balances increased 73% in the year, while customer numbers rose to 570,579 from 429,507.
Secure Trust Bank also published its annual results on Thursday, posting a rise in pretax profit of 40% to GBP36.5 million from GBP26.1 million.
Secure Trust will pay a special dividend from the Everyday Loans sale of 165.0p. This will come in addition to a 55.0p final dividend, up from 52.0p, taking its total payout to 72.0p.
Secure Trust's customer lending balances increased 73% year-on-year in 2015 to GBP1.08 billion, as total customer deposits increased to GBP1.03 billion, a 70% rise. Customer numbers increased 33% to 570,579, while loan impairment charges for the lender have been lower than the level expected at origination.
The lender said its consumer lending activities were robust in the year, while its SME division made a robust contribution in its first year of operations.
Secure Trust said its core equity Tier 1 capital ratio declined to 13.6% from 18.7% a year before but will rise again to 24.1% following the Everyday Loans disposal.
Arbuthnot shares were up 4.5% to 1,359.00p, while Secure Trust shares were up 1.8% to 2,900.00p.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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