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(Sharecast News) - Arbuthnot Banking Group reported a drop in profit for the six months ended 30 June on Tuesday, as anticipated cuts to the UK base rate weighed on earnings.
However, the group highlighted continued operational growth across deposits, specialist lending, and funds under management, and raised its interim dividend by 10%.
Profit before tax for the period was £10.9m, down from £20.8m a year earlier.
Earnings per share fell to 42.5p from 94.6p.
Despite the weaker profitability, the group announced an interim dividend of 22p per share, up from 20p a year ago.
Customer deposits rose 7% during the half to £4.42bn, and were up 14% year-on-year.
Funds under management and administration reached £2.38bn, up 8% since the end of 2024 and 22% year-on-year, supported by £127m of net inflows.
Customer loans fell 4% in the first half to £2.32bn, reflecting what the group described as disciplined lending activity.
However, its specialist division saw lending balances rise 7% since year-end to £895.9m.
"Arbuthnot has continued to grow the overall business and in particular its relationship deposit base, funds under management and specialist commercial lending," said chairman and chief executive Sir Henry Angest.
"The continued strength of the business is reflected in the decision to increase the interim dividend by 10% even though, as anticipated, this year's results reflect the effect of a series of reductions in base rate over the last 12 months."
The group reported a CET1 capital ratio of 12.7% and a total capital ratio of 14.8%, both slightly lower than year-end levels but up year-on-year.
Net assets per share increased to £16.49.
At 0939 BST, shares in Arbuthnot Banking Group were down 1.88% at 937p.
Reporting by Josh White for Sharecast.com.
