UK-based private bank Coutts recorded an operating profit of £64m in Q1 2021, £15m (31%) higher year-on-year.
In addition, there was year-on-year balance growth that was attributed to increases across lending, deposits, and investments. Lending for Coutts increased 11% year-on-year in Q1 2021 to hit £1.7bn thanks to strong mortgage net new lending performance.
Furthermore, deposits increased by 16% to £4.5bn through commercial and personal inflows both in savings and current accounts. AuMas also grew, by 22% this time, year-on-year because of solid net new money inflows supported by increased in investment markets.
Return on equity was 12.4% and 2.4% higher than in Q1 2020. Q1 2021 income is also in line with Q4 2020 at £185m, but was lower than Q1 2020 by £16m.
Coutts CEO on Q1 2021
Peter Flavel, Coutts CEO, said: “Our operating profit is up £15m to £64m and with lower operating costs we have delivered a healthy return on equity of 12.4%. Despite lower interest rates impacting our total income, to have boosted our underlying profits by such a healthy margin is testament to the work of the entire organisation and indicates an increasing appetite from the market. The double-digit percentage growth across lending (11%), deposits (16%) and AuMA (22%) tells us that our personal service, digitally enabled strategy is working.
“There is a very different feeling this quarter than at this time 12 months ago and this is perhaps best underlined by the fact that we have welcomed 493 new clients to the bank this year, compared to 441 in Q1 2020. There is very much a feeling of optimism, both in the bank regarding our future growth targets and with our clients too. This positive outlook is re-affirmed by our latest Prime Property Index, with the headline figure revealing a 27.3% increase in properties sold compared to this time a year ago.
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“The market rebound is further underlined by our strong AuMA growth, with a significant amount coming from the continued increase in inflows to our personal portfolio funds (PPF) – accessible for NatWest, Royal Bank and Coutts customers via our digital investment platform – Invest. This is an indicator that not only are we delivering on our ambition to help more customers understand the importance of investing but that we are also attracting more digitally active customers. Indeed, in March our PPF broke the £1bn AuM marker, with inflows 30% higher than Q4 2020 and forecasts suggesting that trend is set to continue.
“This quarter also saw us agree the sale of our Adam & Company investment management business and AIM legal entity. As part of this, we have also begun the process of integrating the remainder Adam & Company, including the Banking and Lending teams, Financial Planners and Wealth Managers, into Coutts itself.”