Arbuthnot Banking Group reports £11.0m first-half profit and raises dividend

Arbuthnot Banking Group Plc (LON:ARBB) has announced its unaudited results for the six months to 30 June 2026.

FINANCIAL HIGHLIGHTS

OPERATIONAL HIGHLIGHTS

Commenting on the results, Sir Henry Angest, Chairman and Chief Executive of Arbuthnot, said: “Arbuthnot has delivered good growth across all of our business lines, with especially encouraging growth in our relationship deposit base, funds under management and specialist commercial lending. The continued strength of the business is reflected in the decision to increase the interim dividend by 9 per cent even though, as anticipated, these results reflect the effect of a series of reductions in the base rate over the last twelve months. Despite the uncertain economic backdrop, the Group remains well positioned to continue to grow by taking market share while maintaining our disciplined approach to credit, liquidity and capital management.”

The Directors of the Company accept responsibility for the contents of this announcement.

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the “UK MAR”) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company’s obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Chairman’s Statement

The Group has reported a profit before tax of £11.0m for the first six months of the year compared to £10.9m in the same period last year.

As previously noted, the Group’s financial performance can be affected by the level of the Bank of England base rate, as earnings on our significant liquidity resources are linked to the base rate. Over the first six months of 2026, the average Bank of England base rate was 3.75%, compared with 4.48% in the same period in 2025, a reduction of 73bps. However, given the issues in the Middle East, which could lead to higher inflation as the oil price shock becomes embedded in the supply chain, the likelihood of further near-term interest rate cuts seems to have receded.

The small increase in profits compared to the prior year does not fully capture the underlying operational progress delivered across the Group. Given the economic backdrop, I am pleased to note that we have delivered good growth across all of our business lines. Notably, our Wealth Management division reached £3.0bn in funds under management and administration during June.

Our specialist lending divisions have now in aggregate exceeded £1bn in customer loan balances (including operating leases) as we continue to diversify our lending portfolios according to our strategic plans.

Also, we have achieved our “Future State 2” target of £10bn in total client balances (loans, assets available for lease, deposits and funds under management and administration) more than two years ahead of our five-year target. This is a good indicator of how we continue to build a balanced business rather than rely on one side of the balance sheet for growth.

Within our businesses I would like to take this opportunity to highlight the following notable areas of performance. Firstly, our asset finance business, Renaissance Asset Finance (RAF), has achieved loan book growth of £82.2m which is 29% growth in the first six months of the year and 32% since the same point last year. Secondly, Arbuthnot Commercial Asset Based Lending (ACABL) returned to growth in the first half as the level of corporate transactions and private equity activity picked up. The customer loan balances grew by £62.8m or 29% since the year end. Finally, the Wealth Management division reached £3.0bn in funds under management and administration, representing portfolio growth of £319.2m or 12% since the 2025 year end.

Given the continued progress being made by the Group, the Board has decided to pay an interim dividend of 24p per ordinary and ordinary non-voting share, an increase of 2p compared to the interim dividend paid in the prior year. The dividend will be paid on 25 September 2026 to shareholders on the register on 28 August 2026.

On 1 June 2026 we welcomed Stephen Fletcher to the Board as a non-independent, non-executive director. This was after he retired from his executive duties at the end of December 2025. He has a deep understanding and wealth of experience gained from his time with our bank and also prior to that with senior roles at RBS and Coutts.

Banking

Banking’s relationship-led approach continued to support the growth and retention of criteria clients across its Private and Commercial Banking propositions. In the first six months of 2026 the Bank completed its client survey, with our Net Promoter Score increasing 2.1 to 70.2 compared to 2025 and the people satisfaction score increasing 1.0 to 96.1, both of which are considered industry leading metrics.

Deposits finished the period at £4.78bn, a 4% increase against the year end. However, this is after approximately £250m of seasonal outflows of private banking client payments to HMRC, which was offset by commercial banking deposit growth. In addition, much of the success of the H1 2026 inflows into our wealth management business have also come from clients’ cash with Arbuthnot Latham. Given that much of the inflows to our wealth management business have come from existing clients’ deposits, the overall increase suggests that the Bank has a strong deposit gathering franchise.

The Banking loan book grew £40.9m in the first six months of 2026 and on plan, despite the market seeing less activity and increased competition. The Bank continues to hold to its principles of maintaining high quality credit lending to borrowers with strong asset bases, resulting in watchlist client numbers now being at medium term historic low levels.

Wealth Management

Funds Under Management & Administration (FUMA) continued to grow in the first half of 2026 to finish June at £3.00bn, up 12% from the start of the year and representing growth of 26% year on year (30 June 2025: £2.38bn). This was despite the conflict in the Middle East creating volatility in the equity markets as investors weighed up the potential impact on different regions and sectors. Gross inflows of £343m, equivalent to 25% growth on an annualised basis, demonstrate the continued strong organic growth of the Wealth Management business.

In April, the business achieved a key milestone by launching its first fund range. Leveraging the existing macro-led framework and broadly reflecting the Investment Committee’s tactical allocation in our flagship Global Investment Service, the funds provide a more accessible investment vehicle for those clients with lower levels of capital. In July, the business will also launch its Global Direct Service which will provide direct access to bonds and equities. The service will support investors seeking a portfolio of global quality growth companies whilst also opening our Wealth Management proposition to US connected clients.

Arbuthnot Commercial Asset Based Lending (ACABL)

ACABL reported a profit before tax of £4.3m compared to £4.8m for the same period the prior year. The business had pleasing growth in lending balances in the first half of 2026, increasing its loan book from £219.4m at the previous year end to £282.1m at the end of June, representing growth of 29% for the six months and 22% year on year.

The loan book growth was achieved from a combination of new clients, two thirds of which related to event driven transactions, as well as additional facilities to existing relationships, both of which more than offset attrition. The current pipeline indicates that the momentum in loan book growth is expected to continue for 2026.

Following previous economic uncertainty, many portfolio clients have proactively built up cash reserves, which has proven beneficial in shielding them from current rising energy prices and broader market pressures. As a consequence, new watchlist cases for ACABL have reduced.

Renaissance Asset Finance (RAF)

RAF reported a profit before tax of £3.8m (30 June 2025: £3.3m), an increase of 17% compared to the same period in the prior year. It finished the first half with a loan book of £369.4m, equating to annual growth of 32% when compared to the loan book of £279.7m at the same period in the prior year; growth in loan balances was £82.2m since December 2025.

The majority of growth came from RAF’s core specialism of financing high value cars for high-net-worth individuals. The business also achieved a key milestone in the first half of 2026, exceeding £1bn lent since its inception in 2014. 

The Block Discounting business, launched in late 2021, continues to generate significant growth, reporting a 21% increase over the period.

Asset Alliance Group (AAG)

AAG reported a profit before tax of £0.8m (30 June 2025: £0.5m loss), with Assets Available to Lease of £397.9m compared to £382.8m at the previous year end. Origination for the first six months of 2026 was £15.1m. Whilst the coach market has been impacted by increased fuel costs, the bus sector remains more resilient.

The lending portfolio is now well balanced between commercial vehicles and buses, providing greater resilience against external macro-economic forces. Trading in used, end of lease commercial vehicles has also shown signs of recovery in the period, with sales now running at a profit rather than the losses experienced in 2025.

Operations

The Bank has continued to invest in people and technology that support its growth strategy, with a focus on leveraging and optimising investments and maximising the utilisation of technology.

Transformation projects and initiatives continue to focus on improving efficiency and enabling functionality that benefits client service, supports operational efficiency and improves operational effectiveness and resilience. AI capabilities have been selectively introduced, testing use case opportunities and business case realism before scaling and deployment.

Outlook

The UK economy has continued to underperform in the wake of global economic and political tensions resulting in stubborn inflation coupled with the possibility of interest rates remaining higher for longer. The war in the Middle East has affected supply chains including global energy markets, and the medium-term negative effect on businesses and households have yet to emerge. However, our client centric service proposition continues to prove popular and allows us to grow by taking market share while maintaining our strongly held corporate principles.