Arbuthnot Banking Group PLC has upgraded its outlook for full-year 2026 profit after reporting broad-based growth across lending, deposits and wealth management in the third quarter.
The group said customer loans and leased assets reached £2.5bn at 30 September 2026, up from £2.2bn a year earlier. Funds under Management and Administration rose to £3.1bn from £2.5bn, while customer deposit balances increased to £4.9bn from £4.4bn.
That meant customer loans and leased assets grew 12% over the last 12 months, funds under management and administration rose 21%, and customer deposits were up 10% year on year.
Arbuthnot said growth was broad-based across all business units, with specialist subsidiaries increasing 26% over the year. As a result of the loan book growth, the stable rate environment and continued momentum in wealth management over the first nine months of 2026, the board now expects full-year profit before tax to be ahead of prior expectations.
Broad-based trading progress
The group said it made good progress in the third quarter despite what it described as a challenging economic environment. Specialist lending divisions led the performance, with Arbuthnot Commercial Asset Based Lending and Renaissance Asset Finance both delivering growth of more than 40% over the past 12 months.
In wealth management, the business continued to see strong growth after launching its fund proposition earlier in the year. The group said this was driven by both strong new inflows and investment portfolio performance, with net growth of 15% year to date and 21% over the previous 12 months.
At its September meeting, the Bank of England held rates at 3.75%. Arbuthnot said the market had expected rates to fall at the start of 2026, but high oil prices and inflation linked to the war in Iran, together with a 0.25% increase by the US Federal Reserve, had changed the backdrop. The group said any UK base rate rises would provide a further tailwind to performance.
Deposits and lending
Deposits finished the quarter broadly flat at £4.9bn, representing a 2% increase in the quarter and 10% growth over the year. The deposit market remained competitive, particularly for rate-sensitive liquidity, and Arbuthnot said it had chosen not to compete where rates do not make economic sense for the business.
Commercial Banking has increased its deposit book by more than £200m in 2026 to date, supported by what the group described as a service-led deposit proposition. Private Banking deposits have recovered from the tax outflows seen in January, which amounted to approximately £250m.
The group also pointed to continued strong demand from private clients for wealth management services, with deposits being transferred into wealth management products over the past 12 months.
The banking loan book has grown strongly both since year end and over the last 12 months. Arbuthnot said it continues to follow its principles of maintaining high quality credit lending to borrowers with strong asset bases, and watchlist client numbers are now at low levels.
Wealth management and specialist lending
Funds Under Management and Administration reached £3.09bn at the end of September, up 15% from the start of the year and 21% year on year. Gross inflows of £458m, equivalent to 23% annualised growth, were cited as evidence of continued organic growth in the wealth management business.
The business also turned to a net profit for the quarter. Fees and commission from advising clients through the Wealth Planning business contributed to the improved performance and accounted for two-thirds of inflows this year.
Since its launch in April, Arbuthnot’s fund range has attracted more than 40% of all new investment clients and represented 6% of total gross inflows in the six-month period. The group said the funds give access to its core investment decisions through a cost-effective solution and support greater operational efficiency in investment management.
At Arbuthnot Commercial Asset Based Lending, the loan book reached £305.6m at quarter end, up 39% year to date and 46% on an annualised basis. The business said 82% of growth came from new clients, with an increase in private equity-sponsored deal structures. It added that working closely with clients’ management teams and higher cash reserves among borrowers continued to help mitigate portfolio credit losses.
Renaissance Asset Finance ended the quarter with a loan book of £409.5m, up 45% over the last 12 months and 43% since December 2025. Most of that growth came from financing high-value cars for high-net-worth individuals, which the group said had been a particularly strong sector in 2026.
Growth in that division is expected to slow into the fourth quarter because of the interest rate outlook, with financing costs expected to increase. Its Block Discounting business, launched in late 2021, continued to expand and reported a 25% increase in the loan book since December 2025.
Asset Alliance Group
Asset Alliance Group also improved during the period, finishing with Assets Available to Lease of £384.2m, compared with £382.8m at the previous year end and £380.0m at the end of the third quarter last year. Origination for the first nine months of 2026 was £86.5m.
The commercial vehicle division continued to show signs of recovery as new vehicle registrations improved and drove increased lending. However, the coach market remained subdued because of reduced demand in the tourism industry as a consequence of the Middle East conflict.
Arbuthnot said the group’s diversified portfolio across commercial vehicle, bus and coach sectors is now better placed to provide resilience against changes in individual market segments.
