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Private bank plots commercial services push for clients

Private bank plots commercial services push for clients

Arbuthnot Banking Group has announced half yearly profits of £15.7m, an increase of 65 per cent compared to the same period last year, with plans to move into commercial banking underway.

The group is the holding company for private bank Arbuthnot Latham and Co. which saw profit before tax up 111 per cent to £3.7m, compared to £1.7m in the first half of 2014.

According to chairman and chief executive Henry Angest, this is a result of the bank’s hiring additional private bankers over the past two years, which has now led to a substantial increase in new clients opening accounts.

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Customer loans rose to £584m from £394m during the same period last year, including £101m of the residential mortgage portfolio that was purchased in December 2014.

As planned at the time of acquisition, the bank transferred ownership of the loans into its own name in June and at the same time entered into a servicing agreement with Exact Mortgages.

The bank also embarked on three significant investment initiatives to support its future growth, including and operations upgrade with paperless workflow, standardised customer interaction and the implementation of a new banking platform. This work is expected to be completed by the end of 2016.

Secondly, Arbuthnot Latham has agreed to secure 10,000 square feet of additional office space in the City on a short term lease, to be occupied in the second half of 2015.

Finally, it is expanding into commercial banking, with an initial focus on providing business banking services to 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, although the proposition is not expected to launch until 2016.

In addition to recruitment in London, the south west regional office in Exeter agreed a lease and will move into its new offices in the second half of 2015. The north west regional office in Manchester completed further recruitment of both private bankers and a wealth planner, while the Dubai office will break even in July, just two years after opening for business.

In terms of the retail arm Secure Trust Bank, profit was up 40 per cent to £16.1m, from £11.5m during the first half of 2014.

Mr Angest commented: “The group has continued its profitable growth and as a result the board has decided to increase the interim dividend.

“Both banks have detected an improvement in customer sentiment following the decisive result of the general election.”

peter.walker@ft.com