Shares in Arbuthnot Banking Group rose by more than four per cent this morning after the bank reported a 52 per cent rise in annual pretax profits, with performance boosted by growth in its private and retail banking businesses.
Arbuthnot said pretax profit rose to £34.2m for the year ended 31 December, up from £22.5m the year before.
Analysts had expected a pretax profit of £36.7m, according to consensus compiled by Thomson Reuters.
Secure Trust Bank (STB), the group's retail banking business, reported pretax profits of £36.8m, compared to £26.3m the previous year. Customer lending balances rose 73 per cent.
Arbuthnot Latham, the private banking business, also posted a rise in profits, up 65 per cent year-on-year to £6m.
This morning's results also included more details about STB's planned disposal of Everyday Loans, a consumer lending business. The bank said it should be able to pay a 25p special dividend for 2016 once the deal is completed next month.
"The consequence of the sale of the Everyday Loans business – assuming that comes to pass as we expect in April – will mean that at the end of the year, we will be in a position as one of the most strongly-capitalised businesses in the UK," STB chief executive Paul Lynam told City A.M. this morning, adding that later this year the retail bank may turn its attention to "other M&A activities".
STB first revealed earlier this year that it was considering making a bid for Williams & Glyn, the banking business Royal Bank of Scotland (RBS) is required to sell off by the end of next year.
Lynam re-affirmed the bank's interest today, telling City A.M: "We have interest in every business that is for sale.
"I have not any formal conversations with the Royal Bank of Scotland since their press release a couple of weeks ago," Lynam said.
In its full-year results announcement last month, RBS said it remained committed to spinning off Williams & Glyn by the end of 2017, but admitted it continues to face "significant challenges and risks" in divesting the business, noting the separation of the businesses would require "significant structural, governance and IT changes, which will be complex to implement and will impact the group’s customers, operations and controls".
"We may be interested in going through the process as details emerge," Lynam said. "We have an appetite for transactions."
"We have a record of buying and selling well," he added. "We are not looking to pump up our business in the short terms regardless of risks. We are more interested in growing strategically."