Arbuthnot Banking Group said despite unprecedented market conditions, its two banking divisions have delivered robust performances. However, overall results for are expected to show only a small profit after tax, with positive earnings per share.
The group said there has been a more direct impact on performance at Arbuthnot Securities, and this has continued in recent weeks.
Secure Trust Bank has shown a strong improvement in profitability compared to last year, while Arbuthnot Latham has traded profitably. Although it continues to progress towards achieving a satisfactory return on shareholders' equity, its reported profit will be negatively impacted by its share of the Banking Industries' contribution to the Financial Services Compensation Scheme. Both banking businesses remain highly liquid, well funded and well capitalised. Neither has had to seek third party support to strengthen its balance sheet or funding position.
Arbuthnot Securities is expected to show a loss, reflecting the sharp reduction in corporate transactions combined with the adverse impact of volatile markets on the trading book. New management has taken decisive action to cut the book and reduce costs, and as a result Arbuthnot Securities is now well positioned for 2009.
The Group's pretax profits reflect the full contribution from Arbuthnot Securities before adjusting for minority interests. On this basis the Group is expected to show a pretax loss.
Arbuthnot said it continues to be committed to a progressive dividend policy. However, given the intention to finance new business at Secure Trust Bank and the anticipated level of profitability in 2008, it is expected that this year's final dividend will be in line with the interim dividend, making a total payment for the year of 21p per share.
Results for the year ending 31st December, 2008 are expected to be announced on 12th March 2009.
Story supplied by MoneyAM
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