Arbuthnot Share News (ARBB)

(Sharecast News) - Arbuthnot Banking Group reported a decline in profits for 2025 as lower lending volumes and margin compression weighed on income, although the lender pointed to resilient performance and continued growth in deposits and client assets.

Pre-tax profit fell to £24.2m for the year ended 31 December, down from £35.1m a year earlier, while operating income declined to £169.5m from £179.5m.

The AIM-traded firm said its average net margin narrowed to 4.7% from 5.1%, and earnings per share dropped to 109.1p from 152.3p.

Despite the earnings decline, the group increased its ordinary dividend, declaring a final payout of 31p per share, up from 29p, bringing the total dividend for the year to 53p.

That compared with 69p in 2024, which included a 20p special dividend.

Net assets per share rose to 1,694p from 1,636p, with total net assets increasing to £276.4m.

Customer deposits grew 11% to £4.57bn, supported by continued demand across its private and commercial banking franchises, while funds under management and administration rose 21% to £2.68bn, driven by strong inflows equivalent to 22% of opening FUMA.

The group added around 1,200 new banking clients and more than 200 investment management clients during the year.

Customer lending declined 6% to £2.25bn as the bank maintained tight credit discipline and preserved capital amid what it described as suboptimal market rates.

Arbuthnot said it continued to operate with strong capital and liquidity positions, with a CET1 ratio of 13.3% and a total capital ratio of 15.4%, alongside surplus liquidity of £1.42bn above regulatory requirements.

"The group performed resiliently in what continues to be an uncertain and low-growth economic environment," said chairman and chief executive Henry Angest.

"We are encouraged by the double-digit growth in customer deposits and the inflows-driven growth in funds under management.

"The group remains conservatively managed with a robust balance sheet and continues to see client growth opportunities."

At 0905 GMT, shares in Arbuthnot Banking Group were up 3.5% at 897.9p.

Reporting by Josh White for Sharecast.com.

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