Arbuthnot Banking Group grows specialist lending as H1 profit reaches £11m

Arbuthnot Banking Group has reported a solid first-half performance, with profit before tax rising to £11.0 million as the group continued to grow customer deposits, specialist lending and funds under management despite a lower interest rate environment.

For the six months ended 30 June 2026, the banking group recorded profit before tax of £11.0 million, up slightly from £10.9 million in the same period last year. Earnings per share increased to 49.9p from 42.5p, while the board raised the interim dividend by 9% to 24p per share, compared with 22p a year earlier.

Net assets per share also continued to strengthen, increasing to 1,712p from 1,694p at the end of 2025 and 1,649p a year earlier.

Operationally, the group achieved a significant milestone by reaching its Future State 2 target of £10 billion in client balances more than two years ahead of schedule.

The strongest growth came from the Specialist Division, where lending balances exceeded £1 billion for the first time, ending the period at £1.05 billion. This represented an 18% increase since the end of 2025 and a 17% rise compared with the first half of last year.

Customer deposits also continued to grow, increasing to £4.78 billion, up 4% during the first six months of the year and 8% year-on-year.

Customer loans, including leased assets, rose to £2.45 billion, representing growth of 9% since the end of 2025 and 6% compared with June last year, as the group said it maintained its disciplined lending approach.

Meanwhile, funds under management and administration (FUMA) reached £3.0 billion, an increase of 12% during the first half and 26% year-on-year, supported by net inflows of £189 million.

The group’s Common Equity Tier 1 (CET1) capital ratio stood at 12.0% at the end of June, compared with 13.3% at the end of 2025, while the total capital ratio was 13.9%.

“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 results underline Arbuthnot’s continued focus on expanding its specialist banking operations while maintaining strong capital discipline and delivering sustainable growth across its core business lines.