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1. Company Snapshot

1.a. Company Description

Arbuthnot Banking Group PLC, together with its subsidiaries, provides private and commercial banking products and services in the United Kingdom.It operates through Banking, Wealth Management, Mortgage Portfolios, Renaissance Asset Finance, Arbuthnot Commercial Asset Based Lending, Arbuthnot Specialist Finance Limited, Asset Alliance Group, All Other Divisions, and Group Centre segments.The company offers private banking services, including current and deposit accounts, loans, overdrafts, and foreign exchange; financial planning; investment and asset management; asset finance funding; asset based lending, deposits, and specialist finance.


Further, it provides insurance and property development services.Arbuthnot Banking Group PLC was founded in 1833 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on ARBB

Arbuthnot Banking Group PLC's recent performance was negatively driven by the weak UK market, influenced by sluggish trade data from China. This has led to declines in the FTSE 100 and FTSE 250 indices, reflecting global economic uncertainties. As a result, investors are seeking stability and income through dividend stocks. The company's recent opening of a new office in London, attended by HRH Princess Royal, may not have a direct impact on its financial performance. With no recent earnings release, the company's financials remain unchanged.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.38%)

6. Segments

Banking

Expected Growth: 5.5%

Arbuthnot Banking Group PLC's 5.5% growth is driven by strong loan book expansion, fueled by increasing demand for commercial and private banking services. Effective cost management, improved operational efficiency, and a robust risk management framework also contribute to the growth. Additionally, the group's diversified revenue streams, including wealth management and treasury services, provide a solid foundation for sustainable growth.

Asset Alliance Group

Expected Growth: 5.8%

Asset Alliance Group's 5.8% growth is driven by increasing demand for asset-based lending, strategic partnerships, and expansion into new markets. Additionally, Arbuthnot Banking Group PLC's strong balance sheet and risk management capabilities have enabled the group to capitalize on growth opportunities, while its diversified portfolio has mitigated risks and contributed to stable earnings.

All Other

Expected Growth: 4.2%

The 4.2% growth in All Other segment of Arbuthnot Banking Group PLC is driven by increasing demand for wealth management services, expansion of private banking operations, and strategic partnerships. Additionally, the segment has benefited from effective cost management, improved operational efficiency, and a favorable interest rate environment, contributing to its robust growth.

Arbuthnot Commercial Asset Based Lending

Expected Growth: 6.2%

Arbuthnot Commercial Asset Based Lending's 6.2% growth driven by increasing demand for alternative financing, strong relationships with SMEs, and expansion into new markets. Additionally, the segment benefits from a robust risk management framework, diversified portfolio, and strategic partnerships, enabling it to capitalize on growth opportunities in the UK market.

Renaissance Asset Finance

Expected Growth: 5.9%

Renaissance Asset Finance's 5.9% growth is driven by increasing demand for asset-based lending, strategic partnerships, and expansion into new markets. Additionally, Arbuthnot Banking Group PLC's strong capital position and risk management capabilities have enabled Renaissance to capitalize on growth opportunities, while its diversified portfolio and experienced management team have contributed to its success.

Wealth Management

Expected Growth: 5.6%

Arbuthnot Banking Group PLC's 5.6% growth in Wealth Management is driven by increasing demand for discretionary investment management services, expansion of its client base, and strategic partnerships. Additionally, the group's focus on bespoke portfolio management, tax-efficient solutions, and robust risk management frameworks have contributed to its growth.

Mortgage Portfolios

Expected Growth: 5.3%

Arbuthnot Banking Group PLC's 5.3% mortgage portfolio growth is driven by strong demand for residential mortgages, competitive pricing, and an increase in lending to first-time buyers. Additionally, the group's strategic expansion into new regions and partnerships with mortgage brokers have contributed to the growth. Furthermore, the group's digital platform and efficient underwriting process have enabled it to capitalize on market opportunities.

Arbuthnot Specialist Finance Limited

Expected Growth: 5.7%

Arbuthnot Specialist Finance Limited's 5.7% growth is driven by increasing demand for bespoke financial solutions, strategic partnerships, and expansion into new markets. The company's expertise in specialized lending, robust risk management, and efficient operations also contribute to its growth. Additionally, the parent company's strong capital position and support enable Arbuthnot Specialist Finance to capitalize on emerging opportunities.

7. Detailed Products

Private Banking

Personalized banking services for high net worth individuals, including investment management, wealth planning, and bespoke banking solutions.

Commercial Banking

Specialized banking services for businesses, including cash management, trade finance, and lending solutions.

Arbuthnot Latham

Wealth management and investment services, including portfolio management, investment advice, and financial planning.

Real Estate Finance

Specialized lending solutions for property developers, investors, and owners, including development finance, investment loans, and bridging loans.

Securities Based Lending

Lending solutions secured against investment portfolios, providing liquidity and flexibility for investors.

8. Arbuthnot Banking Group PLC's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Arbuthnot Banking Group PLC is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers for Arbuthnot Banking Group PLC is low due to the lack of negotiating power and the presence of switching costs.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Arbuthnot Banking Group PLC is medium due to the presence of multiple suppliers and the moderate level of dependence on them.

Threat Of New Entrants

The threat of new entrants for Arbuthnot Banking Group PLC is high due to the low barriers to entry and the presence of fintech companies.

Intensity Of Rivalry

The intensity of rivalry for Arbuthnot Banking Group PLC is high due to the presence of multiple competitors and the high level of competition in the banking industry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.07%
Debt Cost 8.67%
Equity Weight 51.93%
Equity Cost 8.67%
WACC 8.67%
Leverage 92.57%

11. Quality Control: Arbuthnot Banking Group PLC passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Arbuthnot Banking

A-Score: 7.1/10

Value: 9.3

Growth: 9.0

Quality: 6.3

Yield: 8.1

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

Stock-Card
Sparebanken Vest

A-Score: 7.1/10

Value: 7.9

Growth: 5.1

Quality: 7.6

Yield: 8.8

Momentum: 6.5

Volatility: 6.7

1-Year Total Return ->

Stock-Card
Skjern Bank

A-Score: 6.8/10

Value: 7.8

Growth: 5.4

Quality: 8.1

Yield: 3.8

Momentum: 9.5

Volatility: 6.3

1-Year Total Return ->

Stock-Card
Banca IFIS

A-Score: 6.4/10

Value: 7.3

Growth: 4.1

Quality: 5.4

Yield: 10.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

Stock-Card
Thurgauer KB

A-Score: 5.9/10

Value: 5.0

Growth: 2.0

Quality: 5.5

Yield: 3.8

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

Stock-Card
SpareBank 1 Sørøst-Norge

A-Score: 4.7/10

Value: 5.8

Growth: 4.3

Quality: 5.5

Yield: 5.0

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.97$

Current Price

8.97$

Potential

-0.00%

Expected Cash-Flows