Secure Trust Falls Most Since IPO; Arbuthnot Cuts Majority Stake

  • Holding in the U.K. challenger bank to decline to 20%
  • Sale will raise $213 million for parent company Arbuthnot

Secure Trust Bank Plc, one of the small British banks competing with the nation’s largest lenders, fell the most since its initial public offering five years ago after its parent company said it would cut its controlling stake.

The stock fell as much as 8.9 percent in London trading on Friday for the biggest intraday fall since the Solihull, England-based bank’s November 2011 share sale. Arbuthnot Banking Group Plc, which took the company public and still owns a 51.9 percent stake, is offering 5.8 million shares for 2,500 pence each to institutional investors to reduce its ownership to about 20 percent, according to a statement. 

Led by former Royal Bank of Scotland Group Plc executive Paul Lynam, Secure Trust is among several small consumer and commercial banks vying to win market share from Britain’s four largest lenders, which together control as much as 80 percent of the market. Cutting ties with Arbuthnot, which focuses on private banking, could help the firm to prepare for acquisitions to speed its progress.

The sale, which will raise about 145 million pounds ($213 million) for Arbuthnot, will give Secure Trust the option to “broaden the range of strategic options” open to the company, according to the statement. The bank will seek to replace Chairman Henry Angest, who will focus on running Arbuthnot.

Secure Trust declined 6.8 percent to 2,610 pence at 11:14 a.m. in London trading, while Arbuthnot rose 6.9 percent to 1,590 pence. Keefe Bruyette & Woods is handling the share sale.

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