Secure Trust Bank Regulatory News (STB)

FOR IMMEDIATE RELEASE

15 October 2014

Arbuthnot Banking Group PLC

2014 Third Quarter Trading Update

Arbuthnot Banking Group PLC ("Arbuthnot" or the "Group") today issues an update of trading for the three months to 30 September 2014.

The Group has traded strongly in the third quarter with both banks seeing good demand for their products. As a result of the £75m institutional placing of Secure Trust Bank shares, which was completed on 9 July 2014, the capital base of the Group increased by more than 80%. All of this new capital is available to support growth.

Retail Banking

Secure Trust Bank (STB) has experienced strong demand for its consumer finance lending, especially in Cycle and Motor Finance. It also successfully launched its Season Ticket financing product and expects this to develop further in 2015.

The bank has made good progress with the development of its SME lending business. The Real Estate finance team has built up a significant pipeline of good quality opportunities with prudent loan to values. At the same time it has accelerated its recruitment plans adding to both relationship management and credit risk teams.

Secure Trust Bank Commercial Services, the invoice finance division of the bank, launched as planned on 1 September.

STB's total new lending volumes written during Q3 2014 are over 87% higher than in the same period last year. The loan book, which is now over £500 million, has performed consistently with the trends reported in the first six months of 2014. Impairment levels remain below those expected when the loans were originated.

Private Banking

The investment made by Arbuthnot Latham (AL) in its Private Banking distribution continues to be rewarded.

The bank has seen a good flow of new client introductions leading to attractive loan opportunities and further increases in funds under management.

The Dubai branch has celebrated its first anniversary and remains on track to break even in 2015 as planned.

The sale of certain assets of Gilliat Financial Solutions and its subsequent cessation of business were completed during the quarter, with no material impact on the profitability of AL.

Accordingly, the Group anticipates the full year results will be marginally ahead of market expectations. Given the improving market conditions and the enlarged capital base, the Group remains well positioned to maintain its positive progress. 

Note: Secure Trust Bank also today issued an update on trading for the same three month period. The two announcements should be read in conjunction with each other.

Enquiries:

Arbuthnot Banking Group 0207 012 2400

Henry Angest, Chairman and Chief Executive

Andrew Salmon, Group Chief Operating Officer

James Cobb, Group Finance Director

David Marshall, Director of Communications

Canaccord Genuity Ltd (Nominated Advisor) 0207 665 4500

Sunil Duggal

Numis Securities Ltd (Broker) 0207 260 1000

Chris Wilkinson

Mark Lander

Bell Pottinger (Financial PR) 0203 772 2563

Ben Woodford

Zoe Pocock