Secure Trust Banking has underscored an all-round recovery in the second half of last year with a dividend increase and a confident chairman's statement.
Arbuthnot Securities, formerly Old Mutual Securities, has now been profitable for five months running, finance director Stephen Lockley said.
This corporate stockbroking subsidiary had lost £800,000 in the first half-year and at least as much again in the third quarter.
It lost £1.62 million over the full year, plus £741,000 in exceptional charges, but has been profitable since September, Mr Lockley said. He described Arbuthnot Securities as "the potential star".
A final pay-out of 21.5p, 0.5 up up on last year's, makes the total dividend 31.5 p, costing £4.349 million.
Although the headline profit after reorganisation and redundancy costs, plus a head office move, together costing £ 1.4 million, was only £ 100 , 000 higher at £ 4 million, underlying earnings per share were 90 per cent at 34.9p.
Mr Lockley brushed aside a suggestion that shareholders' who subscribed £3.8 million in new capital in January were now being given £1 million of it back in an uncovered dividend.
A lot of Secure Trust's institutional shareholders are income funds, for whom the 7.2 per cent yield of 7.2 per cent is extremely attractive.
The original personal finance operation in Birmingham, Secure Trust Bank, also recovered strongly in the second six months, with a profit of £ 3.9 million to stand against £3.7 million in the second half of 2003.
After spending £214,000 to upgrade its branches and train staff to sell a wider variety of financial products, it had a profit of £6.6 million.
The private banking wing, Arbuthnot Latham, contributed £1.62 million, after £226,000 the year before, boosted by a decision to release £600,000 of general provisions, which will not be allowed under new international financial reporting standards.