In the commentary to the firm’s half year results, CEO and chair, Sir Henry Angest, said an expansion into commercial banking was one of three initiatives undertaken by the group in an effort to fuel its momentum.
While not expected to launch before 2016, Angest said initially, the focus will be on providing business banking services to Arbuthnot’s entrepreneurial private banking clients.
“Recruitment for the new business stream is already underway with several new bankers expected to join in the remaining months of 2015,” he added.
The other two initiatives are a “transformational” upgrade of its operations, including a shift to a paperless workflow, a new banking platform and the standardisation of its customer interaction, all of which is expected to be completed by the end of 2016. The second initiative is the securing of 10,000 square feet of additional office space in the City on a short term lease to be occupied in the second half of the year.
The group’s private banking subsidiary contributed profits before tax of £3.7m, 111% more than the previous comparable period largely, it said, on the back of the hiring of additional private bankers that have resulted in a “substantial” increase in new accounts.
“The South West regional office in Exeter has agreed a lease and will move into its new offices in the second half of 2015. The North West regional office in Manchester has completed further recruitment of both private bankers and a wealth planner. The Dubai office will break even in July 2015, as expected, just two years after opening for business,” the firm added.
Over the period, it said, customer loans rose to £584m, from £394m in the first half of 2014, deposits grew by 31% to £770m and assets under management increased to £701m from £566m.
The group’s retail bank, meanwhile reported 40% increase in first half profits to £16.
“The business has continued to implement its strategic plan following the significant capital raising it carried out in 2014,” Angest said, “As a result it has seen continued positive trends in its customer lending balances, which overall have grown by 90% compared to the prior year period to stand at £852m.”
