Arbuthnot Banking Group Plc · LSE:ARBB
Arbuthnot Banking — FY2006 Earnings Presentation
21 slides from Arbuthnot Banking's earnings presentation, Mar 20, 2007
Slide 1: 2006 Year End Results
ARBUTHNOT BANKING GROUP PLC 2006 Year End Results 20th March 2007 ARBUTHNOT BANKING GROUP PLC
Slide 2: Introductions
2006 Year End Results Introductions Henry Angest Chairman & Chief Executive ARBUTHNOT BANKING GROUP PLC
Slide 3: Business Review
2006 Year End Results Business Review Andrew Salmon Chief Operating Officer ARBUTHNOT BANKING GROUP PLC
Slide 4: Key Messages
Key Messages ¾ Diversified and independent approach continues to produce good results ¾ Turnaround progresses as planned at Arbuthnot Securities – profits nearly double in 2006 ¾ Profit on sale and leaseback of Arbuthnot House ¾ New management taking action to restore growth at Secure Trust Bank ¾ P
Slide 5: Strategic Update
Strategic Update ¾ Group remains committed to being a diversified financial services group ¾ Seeks to generate quality earnings to fund a progressive dividend policy ¾ Priorities: ¾ Turnaround of Secure Trust Bank ¾ Expansion of Arbuthnot Securities ¾ Generating an appropriate return on capital from
Slide 6: Operational/Divisional Review
2006 Year End Results Operational/Divisional Review Andrew Salmon Chief Operating Officer ARBUTHNOT BANKING GROUP PLC 5
Slide 7: Good Performance in Arbuthnot Securities
Good Performance in Arbuthnot Securities ¾ Total income up 11% to £21.7 million ¾ Pre tax profit (before exceptional items) up 77% to £5.0 million ¾ 35 transactions including 6 IPOs in 2006 ¾ Corporate client list increased to 75 (end February ’07) – fastest growing in market ¾ Secondary revenue and
Slide 8: Strategic Update on Secure Trust Bank
Strategic Update on Secure Trust Bank ¾ Senior management changes to address performance at STB ¾ Key themes of overall strategy for Secure Trust Bank ¾ Enhancement of the core “OneBill” product ¾ Focus on building customer base of “OneBill” ¾ Integration of separate business units into single brand
Slide 9: Progress towards profitability in Arbuthnot Latham
Progress towards profitability in Arbuthnot Latham ¾ 18% Deposit growth, 11% Loan book growth, 11% Client growth ¾ Investment management performance strong with average performance in 2006 3.3% ahead of benchmark ¾ Investment of £1.1m in new business areas reduced profitability in 2006 ¾ Attracted a
Slide 10: Swiss Bank operational in 2007
Swiss Bank operational in 2007 ¾ Development of offshore business ¾ Appointment of Hans-Rudolf Strasser as Chief Executive in March 2007 ¾ Joins in the next few months ¾ Detailed regulatory submission in first half 2007 ¾ Outsource provider identified ¾ Operation in second half 2007 (subject to regu
Slide 11: Financial Results
2006 Year End Results Financial Results Paul Sheriff Group Finance Director ARBUTHNOT BANKING GROUP PLC 10
Slide 12: Headline Results
Headline Results 2006 2005 % Change Net interest income 10,126 9,497 7% Net fee and commission income 43,546 43,781 (1)% Trading income 4,102 3,069 34% Operating income 57,774 56,347 3% Operating expenses (47,559) (47,339) 0% Impairment losses (1,986) (1,641) 21% Profit before tax and exceptional it
Slide 13: Financial Highlights
Financial Highlights ¾ Balanced and diversified income across three divisions ¾ Growth in pre tax profits continues ¾ Operating profit covers dividend ¾ Exceptional items have strengthened balance sheet ¾ Significantly improved capital position to fund growth ¾ Continuation of dividend policy ARBUTH
Slide 14: Balanced & Diversified Income across three divisions
Balanced & Diversified Income across three divisions 2006 Arbuthnot 2005 23% Latham ¾ Operating Income up 3% in 22% 35%33% 24% 24% 2004 2006 to £58m Arbuthnot Securities ¾ Benefits of diversification in Secure income over three years 52% 45% Trust 42% Bank 60 ¾ Significant increase over 3 years 50 a
Slide 15: Growth in Pre Tax Profits continues
Growth in Pre Tax Profits continues ¾ Operating Profit increased by 12% to £8.2m ¾ Pre tax profits on continuing activities increased by 92% to £14.7m ¾ Significant growth in profit at Arbuthnot Securities Secure 16 14 Trust Group & Bank Other Costs 14 12 +92% 12 10 Exceptional 10 Items 8 Arbuthnot
Slide 16: Operating Profit covers dividend
Operating Profit covers dividend ¾ Operating profit covers 104% of dividends paid in 2006 ¾ Increase in minority interest as a result of increasing profit at Arbuthnot Securities ¾ Post tax Operating profit attributable to shareholders similar to 2005 2005 2006 9 9 8 8 7 7 Tax Minority Tax Minority
Slide 17: Exceptional Items have strengthened Balance Sheet
Exceptional Items have strengthened Balance Sheet ¾ Total Exceptional Items of £6.5m (pre tax) ¾ Balance Sheet net assets increased by £4.6m Profit on Long 14 sale of Term building Bonus 12 Restructuring Costs Bad debt 10 provision 8 Tax 6 4 £6.5m £4.6m 2 Total profit on building £15.3m 0 ARBUTHNOT
Slide 18: Significantly improved capital position to fund growth
Significantly improved capital position to fund growth 40 -22% ¾ Overall Regulatory Capital Tier 2 Capital increased by 30% to £48m 25 +62% Tier 1 ¾ Risk weighted assets increased by 10 Capital 5% to £211m 2005 2006 -5 ¾ Significant capital available to fund future growth (e.g. Swiss office) 200 +5%
Slide 19: Continuation of Dividend Policy
Continuation of Dividend Policy ¾ Dividend up 0.5p to 32.5p (interim 10.5p and final up 0.5p to 22p) ¾ Recently dividends have increased by 0.5p per annum 35 30 25 2004 2005 2006 ARBUTHNOT BANKING GROUP PLC 18
Slide 20: Key Messages
Key Messages ¾ Diversified and independent approach continues to produce good results ¾ Turnaround progresses as planned at Arbuthnot Securities – profits nearly double in 2006 ¾ Profit on sale and leaseback of Arbuthnot House ¾ New management taking action to restore growth at Secure Trust Bank ¾ P
Slide 21: Forward Looking Statements
Forward Looking Statements This document is a summary only of certain information contained in the announcement dated 20 March 2007 and should be read in conjunction with the full text of the announcement. This document contains forward looking statements with respect to the business, strategy and p
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