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Hardman & Co Research (ARBB)

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Monday 20 July, 2020

Hardman & Co Research

Arbuthnot Banking Group (ARBB): 2020 interim results: credit robust, rate sensitivity

Hardman & Co Research
Hardman & Co Research: Arbuthnot Banking Group (ARBB): 2020 interim results: credit robust, rate sensitivity

20-Jul-2020 / 10:45 GMT/BST


Hardman & Co Research: 2020 interim results: credit robust, rate sensitivity

To be resilient, a bank needs three things - low risk assets, strong capital and surplus deposits. ABG has all three. The low-risk assets are reflected by the small percentage (and falling) Stage 2 and Stage 3 loans in the private bank as well as low loan to values. Surplus capital is now £66m and deposits exceed loans by £0.6bn. Profits before tax, though, fell from £2.9m to £0.2m as the decline in base rate squeezed margins (£2.7m cost) and with a £1m incremental COVID-19-related impairment. Our 2020 base-case scenario is now for a small loss (previously breakeven). The shares trade at 64% of NAV, implying value destruction to perpetuity.

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https://www.hardmanandco.com/research/corporate-research/2020-interim-results-credit-robust-rate-sensitivity/

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About Hardman & Co: For the past 25 years Hardman has been producing specialist research designed to improve investors' understanding of companies, sectors, industries and investment securities. Our analysts are highly experienced in their sectors, and have often been highly rated by professional investors for their knowledge.  Our focus is to raise companies' profiles across the UK and abroad with outstanding research, investor engagement programmes and advisory services. Some of our notes have been commissioned by the company which is the subject of the note; this is clearly stated in the disclaimer where this is the case.

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End of Announcement - EQS News Service

1097191 20-Jul-2020 

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