Arbuthnot Banking (ARBB) AI Stock Analysis

• Market Cap: £141.23M
• Dividend Yield: 5.68%
• Average Volume (3M): 3.22K
• Price to Earnings (P/E): 8.7
• Beta (1Y): 0.20
• Revenue Growth: 1.68%
• EPS Growth: -46.69%
• Country: UK
• Employees: 883
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.42
• Shares Outstanding: 16,186,344
• 10 Day Avg. Volume: 3,561
• 30 Day Avg. Volume: 3,219
• PEG Ratio: -0.18
• Price to Book (P/B): 0.54
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 19.02
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: 930.00p ▲(5.38% Upside)

The score is held back primarily by uneven financial quality—especially volatile cash flow and weaker recent trends (2024 revenue decline and lower ROE). Valuation is a key offset (low P/E and strong dividend yield), while technical indicators are neutral-to-soft and the recent corporate update is supportive but not enough to overcome cash-flow inconsistency.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business model, supporting long-term financial stability.

Equity Position

A robust equity position with no debt enhances financial stability, providing flexibility for strategic investments and growth.

Wealth Management Growth

Significant growth in wealth management expands revenue streams and strengthens competitive advantage in personalized financial services.

Negative Factors

Profitability Fluctuations

Fluctuating profitability margins suggest potential instability in earnings, which could impact long-term financial performance.

Interest Expense Impact

Rising interest expenses reduce profitability, potentially affecting cash flow and limiting resources for future growth initiatives.

Cash Flow Variability

Variability in cash flow management can hinder strategic planning and investment, impacting long-term financial health and stability.

Arbuthnot Banking Business Overview & Revenue Model

Company Description

Arbuthnot Banking Group PLC, together with its subsidiaries, provides private and commercial banking products and services in the United Kingdom. It operates through Banking, Wealth Management, Mortgage Portfolios, Renaissance Asset Finance, Arbuthnot Commercial Asset Based Lending, Arbuthnot Specialist Finance Limited, Asset Alliance Group, All Other Divisions, and Group Centre segments. The company offers private banking services, including current and deposit accounts, loans, overdrafts, and foreign exchange; financial planning; investment and asset management; asset finance funding; asset based lending, deposits, and specialist finance. Further, it provides insurance and property development services. Arbuthnot Banking Group PLC was founded in 1833 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Arbuthnot Banking Group generates revenue through a variety of financial services. The primary revenue streams include interest income from loans and advances to customers, fees and commissions from wealth management and advisory services, and transaction fees related to retail banking operations. The group also earns money through investment activities, leveraging its expertise in asset management to provide returns on proprietary investments. Additionally, Arbuthnot maintains strategic partnerships and business relationships with other financial institutions, enhancing its service offerings and expanding its market reach. Factors such as interest rate fluctuations, economic conditions, and regulatory changes also significantly impact the company's earnings.

Arbuthnot Banking Financial Statement Overview

Summary

Income statement is solid but mixed: strong multi-year revenue growth (2020–2024) and positive profitability, offset by 2024 revenue decline and some margin/earnings sensitivity over the cycle. Balance sheet is improving with higher equity and better leverage trends, but debt-to-equity remains meaningful and ROE fell (2023 to 2024). Cash flow is the key weakness due to highly volatile operating cash flow and thin/unstable free cash flow relative to net income.

Income Statement

Revenue has expanded strongly over the last five years (2020: 90.4M to 2024: 229.7M), but the latest year shows a pullback (2024 revenue growth: -4.99%). Profitability is positive and fairly steady at the bottom line (net margin: 10.8% in 2024 vs. 12.8% in 2023), indicating a healthy earnings base despite some margin compression. A key weakness is choppy operating performance over the cycle (loss in 2020, modest profits in 2021, then stronger 2022–2024), suggesting earnings can be sensitive to the rate/credit environment.

Balance Sheet

The balance sheet shows improving capital over time (equity up from 194.0M in 2020 to 267.0M in 2024) alongside strong asset growth (assets up from 2.85B to 4.73B). Leverage remains meaningful with debt running slightly above equity (debt-to-equity: 1.07x in 2024), though this has improved from higher levels earlier in the period (around 1.47–1.49x in 2020–2021). Returns on equity are solid but trending down recently (14.0% in 2023 to 9.3% in 2024), which points to softer profitability relative to the capital base.

Cash Flow

Cash generation is volatile. Operating cash flow swung from negative in 2023 (-24.2M) to very strong in 2024 (369.2M), but free cash flow remains thin relative to earnings in 2024 (7.6M free cash flow vs. 24.9M net income). Free cash flow also deteriorated sharply year-over-year (2024 free cash flow growth: -109.18%) after already being negative in 2023, highlighting inconsistent conversion of earnings into discretionary cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	248.18M	229.73M	178.25M	160.48M	105.41M	90.39M
Gross Profit	173.02M	229.73M	220.25M	128.93M	88.83M	90.39M
EBITDA	25.11M	0.00	0.00	31.93M	12.60M	3.21M
Net Income	16.36M	24.85M	35.38M	16.46M	6.79M	-1.33M
Balance Sheet
Total Assets	5.03B	4.73B	4.34B	3.61B	3.36B	2.85B
Cash, Cash Equivalents and Short-Term Investments	768.72M	911.89M	-119.82M	848.52M	888.14M	747.07M
Total Debt	94.56M	285.72M	284.90M	281.49M	298.38M	286.05M
Total Liabilities	4.76B	4.46B	4.09B	3.40B	3.16B	2.66B
Stockholders Equity	269.18M	266.96M	252.44M	211.98M	200.88M	194.02M
Cash Flow
Free Cash Flow	103.82M	7.59M	-29.02M	21.80M	-3.54M	-11.59M
Operating Cash Flow	108.46M	369.16M	-24.18M	29.04M	37.49M	-4.51M
Investing Cash Flow	-425.67M	-282.87M	-543.47M	-305.71M	-242.96M	99.52M
Financing Cash Flow	551.07M	-13.37M	625.08M	237.06M	346.54M	279.89M

Arbuthnot Banking Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 882.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ARBB, the sentiment is Negative. The current price of 882.5 is above the 20-day moving average (MA) of 879.88, below the 50-day MA of 884.40, and below the 200-day MA of 927.15, indicating a bearish trend. The MACD of -3.00 indicates Positive momentum. The RSI at 44.33 is Neutral, neither overbought nor oversold. The STOCH value of 43.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:ARBB.

Arbuthnot Banking Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STB	68 Neutral	£269.67M	11.52	6.47%	2.66%	9.09%	-9.36%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
NBS	66 Neutral	£1.40B	0.55	12.71%	―	24.32%	122.52%
PAG	65 Neutral	£1.67B	9.64	12.70%	4.74%	-4.98%	3.02%
MTRO	62 Neutral	£896.83M	8.46	9.14%	―	-29.12%	964.19%
ARBB	59 Neutral	£141.23M	8.71	6.22%	5.68%	1.68%	-46.69%

Arbuthnot Banking Corporate Events

Arbuthnot Banking Group Reports Strong Q3 Performance Amid Economic Uncertainty

Arbuthnot Banking Group PLC reported a strong performance in its third quarter trading update, with a notable 24% increase in Funds under Management and Administration, reaching £2.5 billion. Despite a challenging economic environment and competitive lending market, the company maintained its strategic focus on relationship-led banking and high-quality credit lending, avoiding aggressive pricing competition. The Group’s cautious lending strategy and focus on capital preservation have positioned it well for future market improvements, while its Wealth Management and Renaissance Asset Finance divisions showed robust growth.