British private bank Coutts has revealed a 6% increase – or £1.7bn ($2.38bn) – in assets under management (AuM) reaching a total value of £32.1bn in 2020, according to the firm’s annual results.
Including £0.8bn in net new money into investment products, this figure, combined with the firms continued five-year top quartile investment performance in main funds is “the most pleasing figure of all” according to CEO Peter Flavel.
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The firm enjoyed a 15.8% increase in return on equity and a pre-provision profit of £308m whilst welcoming 1600 new clients, with roughly 19% of new clients coming from group wide referrals.
Registering a significant year-on-year balance growth, Coutts also saw a £3.8bn increase in deposits and £1.5bn increase in lending.
Explaining this growth, Flavel added: “The £3.8bn increase in deposits reflects an increase in commercial and personal inflows in both savings and current accounts. The £1.5bn lending increase (10%) has been driven mainly by strong mortgage flows, evidencing our natural strengths in flexible prime and super prime lending.”
Despite achieving a £39m reduction in overall costs due to a one-off conduct release, lower strategic costs and an ongoing cost discipline strategy, the firms loan impairment figure grew by £106m.
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By GlobalDataAccording to Flavel, this was driven primarily by the deteriorating economic outlook caused by the outbreak of Covid-19.
He continued: “Lower deposit interest rates were the primary reason that our income figure was down by 2%, but we are proud to have achieved an £0.8bn increase in risk weighted assets, especially given it was less than the lending growth which outlines the impact of capital savings delivered during the year from capital efficiency activities.”
Reflecting on the private bank’s performance across the year, Flavel concluded: “2020 was a testing year for every industry and ours was no different, which is why we can look back with great pride at everything we did for our clients despite operating under the cloud of the Covid-19 pandemic.
“We moved quickly to support our commercial clients with the government lending schemes and worked closely alongside our clients facing individual challenges with loan deferrals and other flexible support. The bank has been a valuable source of interest and comfort in these difficult times with our ethos of being more than a bank to our client families.”
