Arbuthnot’s property lending grows to £557m with buy-to-let focus

It attributed this to moving its focus away from commercial real estate and on to professional buy-to-let landlords as fewer people worked in offices and the stamp duty holiday caused a rise in residential property activity. 

Meanwhile, Arbuthnot Latham and Co, under which the commercial business operates, reported a 49 per cent decline in profit to £8.3m.  

It said this was down to a reduction in income resulting from a drop in interest margins and maintaining cash reserves at the Bank of England instead of placing them in higher yielding money markets.  

Overall, the Arbuthnot Banking Group reported a loss before tax of £1.1m last year, down from £7m profit in 2019. This was affected by its investment into Arbuthnot Specialist Finance which was launched in 2019. 

The money put into the brand saw the specialist finance arm report losses of £1m, compared to a loss of £1.2m the year before. 

Lending appetite in this area was also subdued because of the pandemic which impacted business volumes. 

Sir Henry Angest, chairman and chief executive of Arbuthnot, said: “In a year in which the pandemic and associated lockdowns impacted businesses, Arbuthnot delivered a resilient performance and continued to make good operational progress.  

“After a positive start to 2020, growth in lending balances and profits paused from the onset of the lockdown, as historically low base rates and a prudent reduction in the bank’s credit appetite took their toll.”  

He added: “We also had considerable success in growing our client base, with the bank opening a significant number of new accounts in 2020.  

“This progress, together with growing demand for lending and the increased diversity of our business leaves us well placed to resume our growth.”