Rathbones Group (RAT) H1 2025 earnings summary

Executive summary

• Completed migration of Investec Wealth & Investment clients and assets, delivering £47.2m annualised synergies and marking a major integration milestone.

• Announced a £50 million share buyback, the first in the group's history, reflecting board confidence and subject to regulatory approval.

• Strengthened leadership with new CEO designate and CEO of Wealth appointments, with Jonathan Sorrell to succeed Paul Stockton.

• Focus shifting from integration to optimization and growth, leveraging combined capabilities and launching new propositions in 2025.

• Strong capital position with CET1 ratio of 17.4% and capital surplus of £178.4m as of 30 June 2025.

Financial highlights

• Funds under management and administration (FUMA) stable at £109.0bn as of 30 June 2025, recovering from a Q1 low of £104.1bn.

• Operating income rose to £449.1m in H1 2025, up 0.4% year-over-year, driven by asset management and integration synergies.

• Underlying profit before tax for H1 2025 was £107.7m, with margin at 24.0%, down from 25.1% in H1 2024 due to Q1 market volatility and cost headwinds.

• Interim dividend increased by 3.3% to 31.0p per share, maintaining a progressive policy.

• Gross inflows of £5.2bn (9.5% of opening FUMA annualized); net outflows improved in Q2.

Outlook and guidance

• Full-year 2025 results expected in line with market forecasts, with margin improvement anticipated in H2 as integration completes.

• Expecting full £60m synergy target to be achieved by end of 2025, ahead of schedule.

• Underlying operating margin for 2025 expected to match 2024's 25.4%, with improvement weighted to 2026 and a target of 28% by Q4 2026.

• Net interest margin for 2025 to remain stable; modest reduction expected if UK base rate falls below 4%.

• Declining acquisition and integration costs projected to support future EPS growth.