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3 UK Bank Stocks Benefiting From High Savings Rates And Steady Interest Rates

Simply Wall St · 3d ago

UK banks and financial services stocks are sitting at the crossroads of stubborn inflation risks, higher funding costs and attractive savings rates. With the Bank of England expected to hold interest rates at 3.75% for a fifth consecutive meeting, and geopolitical uncertainty feeding through to energy bills and mortgage pricing, the gap between winners and laggards can widen quickly. This article picks out 3 UK Banking & Financial Services screener stocks that appear well positioned or resilient against these pressures, and explains how today’s mix of higher fixed-rate mortgages, strong savings rates and volatile markets could impact each one.

Arbuthnot Banking Group (AIM:ARBB)

Overview: Arbuthnot Banking Group is a London based private and commercial bank that serves UK clients with current and deposit accounts, tailored lending against property and other assets, and bespoke services for entrepreneurs and professionals. It also offers wealth management, asset and invoice finance, vehicle finance and specialist lending through a range of focused subsidiaries.

Operations: Arbuthnot Banking Group generates most of its revenue from Banking excluding Wealth Management at about £99.5m, with additional contributions from Wealth Management at £18.9m, Asset Alliance Group at £16.5m, Renaissance Asset Finance at £15.8m, Arbuthnot Commercial Asset Based Lending at £15.4m and other divisions at £9.5m, partly offset by a £1.1m segment adjustment.

Market Cap: £135.4m

Arbuthnot Banking Group offers an interesting mix of a long established UK private bank and focused specialist lenders at a time when higher savings rates and a steady Bank of England base rate support interest income. The stock trades well below one widely used DCF estimate of fair value, while also sitting on a lower P/E than many European banking peers. Recent results show growing net interest income and earnings. Investors still need to weigh this against a higher level of bad loans and a relatively low allowance for potential losses, plus an evolving board with several recent appointments. For readers who want the full picture on valuation, balance sheet strength and the impact of today’s interest rate backdrop, there is much more beneath the surface here.

Arbuthnot Banking Group looks like a classic valuation story hiding in plain sight, with a discounted P/E and a DCF gap that many investors may be brushing past. The real question is what the DCF valuation analysis for Arbuthnot Banking Group reveals about the trade off between those bad loans, the modest loss allowance and the earnings power of its specialist lending mix.

ARBB Discounted Cash Flow as at Jul 2026
ARBB Discounted Cash Flow as at Jul 2026

Secure Trust Bank (LSE:STB)

Overview: Secure Trust Bank is a UK based specialist bank that offers consumer finance for items like furniture, jewelry and dental care, alongside real estate and asset based lending to property developers, SMEs and some larger corporates. It distributes these products both in store and through online channels from its base in Solihull.

Operations: Secure Trust Bank generates most of its revenue from Consumer Finance Retail Finance at about £82m, with Business Finance Real Estate Finance at £25.7m, Business Finance Commercial Finance at £18.8m and Other income of £7.3m, all from the United Kingdom.

Market Cap: £297.7m

Secure Trust Bank sits at the heart of today’s savings and lending landscape, with specialist retail and property lending backed by a growing digital platform and tight cost control. Higher savings rates and a steady Bank of England base rate can support its funding profile, while a share buyback and higher dividend indicate management confidence. At the same time, investors need to weigh a relatively high bad loans ratio and low loss allowance, as well as upcoming leadership change as the long serving CFO prepares to retire in 2027. For readers monitoring how specialist lenders might use stable rates, savings inflows and digital efficiency to their advantage, Secure Trust Bank merits closer attention.

Secure Trust Bank’s mix of retail and property lending, higher savings rates and tight cost control could be masking a far more interesting story. Get the full picture in the 3 key rewards and 3 important warning signs

LSE:STB P/E Ratio as at Jul 2026
LSE:STB P/E Ratio as at Jul 2026

Funding Circle Holdings (LSE:FCH)

Overview: Funding Circle Holdings runs an online lending platform that connects small businesses with finance such as term loans, government backed facilities, FlexiPay credit and business credit cards, as well as asset, vehicle, agricultural and equipment finance.

Operations: Funding Circle Holdings generates most of its revenue from Term Loans at about £167.4m, with a growing contribution from Flexipay at £36.9m.

Market Cap: £626.3m

Funding Circle Holdings provides direct exposure to the shift towards online SME lending, with AI based credit models, higher margin FlexiPay products and reaffirmed 2026 revenue guidance of at least £235m. This points to a business that is seeking to scale beyond plain term loans. The current P/E sits below the UK market average and recent earnings growth and margins are strong. However, the company still relies entirely on institutional funding rather than deposits and therefore carries higher funding risk and share price volatility. With a board refresh, growing forward flow commitments and early stage products still maturing, the key question is how sustainable these returns are as rates, inflation and investor risk appetite all move around the company.

Funding Circle Holdings looks like it could be decoupling from traditional SME lenders as its AI credit models and higher margin FlexiPay products scale. The real twist sits inside the analyst forecasts for Funding Circle Holdings where a single assumption changes the story completely.

LSE:FCH Earnings & Revenue History as at Jul 2026
LSE:FCH Earnings & Revenue History as at Jul 2026

The three UK banking and financial services stocks covered here are only a starting point, and the full UK Banking & Financial Services screener surfaces 25 more companies with equally compelling narratives that you can assess side by side in the UK Banking & Financial Services screener. Use Simply Wall St to unlock filters around balance sheet strength, interest rate sensitivity and earnings drivers so you can identify and analyze ideas for your own watchlist.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.