Arbuthnot Banking Group (ARBB) is in a period of transition following the sale of the Everyday Loans Group (ELG) and shares in Secure Trust (STB). The gains crystallised by these disposals resulted in a first half post-tax profit of £225m and an NAV of 1,852p. Prospectively, balance sheet strength is likely to be used for growth in the Arbuthnot Latham loan book and opportunistic M&A. The current below-book valuation appears cautious in view of the bank’s history of NAV growth and the conservative, long-term approach taken by management.
