Arbuthnot reports £24.2m profit as asset finance grows

Arbuthnot Banking Group has reported a resilient set of results for the year ended 31 December 2025, with mixed performance across its specialist lending divisions, including asset finance, commercial vehicle leasing and asset-based lending.

The Group posted profit before tax of £24.2 million, down from £35.1 million the previous year, reflecting lower interest income amid a declining rate environment and tighter lending conditions.

Despite the reduction in overall profitability, Arbuthnot continued to make strategic progress across its specialist finance businesses, with growth in its asset finance arm offset by more challenging conditions in other areas.

Asset finance (RAF) delivers record profit

Renaissance Asset Finance (RAF) was a standout performer, delivering a record profit before tax of £7.2 million, up from £5.6 million in 2024. Growth was driven by higher lending volumes, improved margins and strong operational efficiency.

The loan book expanded by 16% to £285.8 million, supported in part by significant growth in its block discounting business, which increased balances by 36% during the year.

The division continues to focus on providing non-regulated asset finance to SMEs and high-net-worth individuals, maintaining low bad debt levels and stable yields.

Asset-based lending (ACABL) impacted by slower deal activity

Arbuthnot Commercial Asset Based Lending (ACABL) reported a profit before tax of £8.9 million, down from £11.9 million in the prior year, reflecting a more subdued transaction environment.

Loan balances declined slightly to £219.4 million, as macroeconomic uncertainty led to fewer event-driven deals and reduced private equity-backed activity.

However, the business maintained strong credit quality, with low impairment levels and continued focus on SME and lower mid-market lending secured against invoices, stock and other assets.

Commercial vehicle leasing (AAG) faces challenging market

The Group’s commercial vehicle leasing arm, Asset Alliance Group (AAG), reported a loss of £2.3 million, compared with a small profit in 2024, as market conditions weighed heavily on performance.

A subdued commercial vehicle market, coupled with weaker demand for used trucks, led to reduced profitability and a loss on residual values for the first time in the division’s history.

In response, AAG accelerated the disposal of used vehicles, reducing stock levels by around 60% during the year. While this impacted margins, the Group said market conditions had begun to normalise in early 2026.

Strategic focus amid uncertain outlook

The Group noted that while loan balances declined overall due to a cautious lending approach, portfolios in RAF and AAG continued to grow, reflecting targeted investment in higher-return segments.

Looking ahead, Arbuthnot said it remains focused on deploying capital selectively, maintaining credit discipline and positioning its specialist finance businesses for growth as market conditions stabilise.