Investment banking woes hit Arbuthnot

BANKING group Arbuthnot yesterday warned its investment banking arm had suffered over the third quarter from deteriorating market conditions, sending its shares plummeting.

Arbuthnot, which also operates wealth management and financial planning services, said its investment banking arm had nonetheless managed to remained profitable for the past year, with its corporate finance pipeline for the fourth quarter looking encouraging.

“Investment banking market conditions deteriorated sharply in the third quarter, leading to difficult trading for Arbuthnot Securities,” the firm said. “Commission income was also impacted by the general decline in market volumes.”

The bank said that both its private banking and retail banking operations had performed well over the quarter, though the latter, operating under the Secure Trust Bank name, continued to be affected by the cost of carrying significant surplus deposits and by the restructuring of its management team.

Arbuthnot’s investment banking troubles sent its shares into freefall yesterday, with the stock down 4.8 per cent at 395p by the close of trading yesterday.