Arbuthnot raises 2026 profit outlook as loans grow 12% to £2.5 billion
Key Facts
Arbuthnot Banking Group raised its 2026 pre-tax profit outlook, saying the result would exceed previous expectations, in a trading update issued on 22 October covering the three months ended 30 September. The update came as customer loans and lease assets rose to £2.5 billion, up 12% year on year from £2.2 billion at 30 September 2025. The company attributed the performance to growth in specialist lending, alongside continued expansion in wealth management. Customer deposits also reached £4.9 billion, up 10% over 12 months and 2% during the quarter. The update puts credit growth and wealth management at the forefront of the performance drivers behind the group’s improved annual outlook.
Funds under management and administration rose to £3.09 billion at the end of September, from £2.54 billion a year earlier, an annual increase of 21% and growth of 15% since the start of 2026. The group said wealth management recorded gross inflows of £458 million during the quarter, equivalent to calculated annual growth of 23%. This figure separates wealth management inflows from banking deposit growth, as the disclosure reports a separate measure for each. The figures show an expansion in the volume of funds managed by the group alongside growth in its lending books. The update did not specify, among the facts reported, how much of the overall increase in funds under management and administration came from inflows and how much from asset performance.
The company said specialist lending units grew 26% in the 12 months ended 30 September, while the loan books of ACABL and Renaissance Asset Finance each grew by more than 40%. ACABL ended the period with a loan book of £305.6 million, up 39% since the start of the year and at a calculated annual growth rate of 46%. Renaissance Asset Finance had a loan book of £409.5 million at the end of the quarter, up 45% year on year and 43% since December 2025. The company expects Renaissance Asset Finance growth to slow in the fourth quarter, with funding costs expected to rise. This presents a more mixed picture within specialist lending: strong book expansion through the end of September, alongside an expected slowdown at one unit in the following period.
On deposits, the group said the funding market was highly competitive and that it was not seeking to match rates it did not consider economically viable. It said commercial banking deposits had increased by more than £200 million since the start of 2026. This followed seasonal outflows of about £250 million in January from private banking deposits, as customers paid taxes. Total customer deposits stood at £4.9 billion at the end of September, up 2% during the quarter and 10% year on year. The disclosure therefore combines annual deposit growth with a stated decision not to chase liquidity through uneconomic rates, while commercial deposit growth remains one of the figures the company cited to illustrate developments in its funding base.
The group’s update comes ahead of the Bank of England’s next decision, scheduled for 5 November 2026, after the bank held interest rates at 3.75% in September. Governor Andrew Bailey said persistent energy price volatility increases the likelihood that rates may need to rise to ensure inflation returns to its 2% target. This puts funding costs and liquidity in the context of upcoming monetary policy, while Arbuthnot expects Renaissance Asset Finance growth to slow as funding costs rise. The update gave no figures on the impact of the next interest rate decision on the group’s profits or funding costs. The next decision date remains the scheduled next milestone in the British monetary policy calendar.