ARBB Arbuthnot Banking Group

Hardman & Co Research on Arbuthnot Banking Group (ARBB) Trading update: taking ABG to the next level

Hardman & Co Research
Hardman & Co Research on Arbuthnot Banking Group (ARBB) Trading update: taking ABG to the next level

24-Oct-2023 / 15:15 GMT/BST
The issuer is solely responsible for the content of this announcement.


Hardman & Co Research | Banks

Arbuthnot Banking Group (ARBB) | Trading update: taking ABG to the next level

 

In our view, the key takeaway from the recent 3Q trading statement is how ABG is progressing strategically towards its “Future State 2” plan. In particular, we note i) specialist SME finance divisions generating the ambitious balance sheet growth in the plan, ii) optimising the core relationship banking franchise, which, in this period, saw 7% deposit growth ‒ given the level of base rates, this is a profitable product for a relationship bank, and iii) continued investment, which, at times, requires a step change in cost rather than a gentle evolution. To meet expected multi-year demand, ABG is increasing its central London HQ office space by 45% at an annual increase in cost of ca.£5m (with further dual running costs until October 2024 as it is refitted).

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