Private bank C. Hoare & Co saw its pre-tax profit fall by 21.2 per cent year-on-year to £63.7m at the end of March 2025, its Annual Report has revealed.

C. Hoare & Co chair, Lord Nick Macpherson, said that profits had fallen to a “more normalised” level, with the lower base rate driving an “expected reduction” in profits.

The report said that the £17.1m decrease in pre-tax profits was less than the bank had expected.

The private bank’s income also declined over the year, falling by 8.2 per cent from £271.7m to £249.4m at the end of March.

It attributed the drop in income to a reduction in the base rate and a higher proportion of deposit customers moving to more stable, higher paying products.

Following two years of inflation-driven cost increases, costs fell from £187.2m to £183.4m year-on-year due to a reduced average headcount of 573 (down from 587) and lower profit-driven charitable donations.

Meanwhile, customer deposits rose by 5.4 per cent to £6.43bn in 2024/25 and customer lending increased by 6.5 per cent to £2.35bn over the same period.

The percentage of deposits held with the Bank of England increased from 22 per cent to 24 per cent.

Tier 1 capital, including the current year’s profits, increased from £483m to £526m, while the bank’s tier 1 ratio fell slightly from 23.1 per cent to 23 per cent.

“Strong capital and liquidity are the enduring bedrock of the bank’s success, providing reassurance to customers, partners and regulators alike,” commented Macpherson in the report foreword.

“The strength of our balance sheet means we can continue to invest strongly in delivering our goals of simplifying processes for customers and colleagues, refreshing our technology, improving resilience, and staying ahead in the ongoing fight against fraud and cyber security.

“The bank’s balance sheet continued to grow steadily. Lending balances rose by 6 per cent for the second year in a row, a reflection of our bespoke and agile loan proposition. Deposits grew by 5 per cent despite the headwind of quantitative tightening and competition from tax-advantaged gilts.

“Profits fell to a more normalised £64m. As signposted in last year’s report, the lower base rate drove an expected reduction in profits. Costs and headcount were marginally lower than in the previous year, after two years of elevated growth spent delivering the transformation agenda.

“Our investment reserve was created to make the bank’s excess capital work by investing globally and, ideally, outside banking. The investment case has been proven, as performance of the reserve has tended to have an inverse relationship with that of the banking book.

“Despite the fall in equity values in February and March, it made a positive contribution to profit, albeit a reduced benefit versus prior year. In the twin interests of resilience and stability, we will keep the reserve under review.”

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