Arbuthnot Banking Group plc (LON:ARBB) was discussed by Gervais Williams, Co-Fund Manager of Diverse Income Trust plc (LON:DIVI) in an exclusive interview with DirectorsTalk.
DirectorsTalk asked:
Arbuthnot Banking Group is an enormously successful private and commercial bank. It reported customer balances of £3.9 billion, and funds under management grew to over £2 billion at the end of September 2024 but its share price doesn’t seem to reflect the success that it’s been achieving though. What’s your view?
Gervais Williams commented:
It doesn’t. I think what’s been interesting about the banking sector generally is how successful the share prices have been over the last 12 months. NatWest, for example, over the last 12 months has risen almost 100%.
It’s not a tremendously exciting company, it’s doing perfectly well, perhaps they have had fewer write-offs than they expected. Arbuthnot Banking, we think, is a better bank than NatWest, we think there’s more upside. If anything, we think the growth has been constrained by their internal systems, they’ve needed to upgrade their internal systems before taking on all business customers.
We think it’s a terrific bank. We think it’s very overlooked. We think it’s got just the kind of upside that many of the mainstream banks have got, it just hasn’t come around quite yet. Not a problem. It can come in the next 12 months or next two years.
So, from that point of view, we think these smaller banks have been overlooked at a time when perhaps a lot of the investors have been pretty excited by the big banks. We think the small banks, particularly Arbuthnot have got just as good opportunities, if not better.
Arbuthnot Banking Group PLC (LON:ARBB), trading as Arbuthnot Latham, provides private and commercial banking products and services in the United Kingdom.
The company operates through nine segments: Banking, Wealth Management, Mortgage Portfolios, Renaissance Asset Finance, Arbuthnot Commercial Asset Based Lending, Arbuthnot Specialist Finance Limited, Asset Alliance Group, All Other Divisions, and Group Centre. It offers a range of private and commercial banking services including current and deposit accounts, loans, overdrafts, guarantees, and foreign exchange.
