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 GBP66m and deposits
exceed loans by GBP0.6bn. Profits before tax, though, fell from GBP2.9m to GBP0.2m
as the decline in base rate squeezed margins (GBP2.7m cost) and with a GBP1m
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.
Please click on the link below for the full report:
https://www.hardmanandco.com/research/corporate-research/2020-interim-results-
credit-robust-rate-sensitivity/ [1]
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1097191 20-Jul-2020
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(END) Dow Jones Newswires
July 20, 2020 05:45 ET (09:45 GMT)
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