CAB Payments profits surge as inaugural dividend marks capital return shift

CAB Payments Holdings PLC has delivered its strongest results since listing, combining rapid profit growth with improved operating efficiency and its first interim dividend.

For the six months ended 30 June 2026, total income increased 31% year-on-year to £67.6 million. Statutory profit after tax rose 313% to £9.5 million, while adjusted profit after tax climbed 152% to £13.6 million.

The specialist cross-border payments bank also maintained a strong capital position, allowing the Board to introduce a formal capital management framework. This includes a 2.1p-per-share interim dividend and the potential for future buybacks or special dividends.

You can read the original company announcement for the full financial statements.

CAB Payments' key figures

Metric	H1 2026	Year-on-year change
Total income	£67.6 million	31%
Income excluding deposit net interest income	£52.3 million	48%
Adjusted EBITDA	£23.8 million	82%
Adjusted EBITDA margin	35%	Up from 25%
Statutory profit after tax	£9.5 million	313%
Adjusted profit after tax	£13.6 million	152%
Adjusted earnings per share	5.4p	157%
Operating free cash flow	£17.8 million	87%
Interim dividend	2.1p per share	Inaugural payment
CET1 capital ratio	21.7%	H1 2025: 19.5%

The quality of the earnings improvement is arguably more important than the headline percentage increases. Costs rose, but considerably more slowly than income, allowing more revenue to flow through into profit.

Adjusted EBITDA margin expanded from 25% to 35%, while the adjusted cost-to-income ratio improved from 85% to 72%. The latter measures how much operating cost is required to generate income, so a lower figure signals greater efficiency.

Emerging-market activity drove the growth

Wholesale foreign exchange income increased 75% to £31.0 million, supported by stronger emerging-market volumes, higher take rates and deeper central bank relationships.

A take rate is the income earned as a proportion of transaction volume. CAB's overall take rate increased from 0.12% to 0.19%, equivalent to a seven-basis-point improvement. One basis point is one-hundredth of a percentage point.

Emerging-market foreign exchange volumes rose 21% to £7.6 billion, with the take rate increasing from 0.24% to 0.41%. By contrast, lower-margin G10 currency volumes declined 5% to £12.9 billion following the removal of some high-volume, low-value clients.

That change in mix helped total wholesale and payment foreign exchange income rise 64% to £39.2 million, despite overall volumes increasing by a relatively modest 3% to £20.4 billion.

Payments income grew 19% to £16.3 million, aided by correspondent banking activity and the addition of Deutsche Bank as a global US dollar and euro clearing partner alongside Citibank.

Banking and other income was broadly unchanged at £20.3 million. Deposit net interest income fell 7% to £15.3 million because of lower interest rates, although growing deposits partly offset that pressure.

Client and strategic progress

CAB added 32 new active clients during the half, taking the total to 601. This was only nine more than at the end of 2025 because additions were partly offset by the deliberate removal of lower-value clients and ordinary attrition.

Payment transactions increased 21% to 675,000. The company also completed its first trade finance syndication as lead arranger and executed initial corporate transactions for Emirates and TotalEnergies.

Two multi-year global payments mandates were agreed with major international development organisations. Income from this client category increased 47% to £8.8 million, while income from fintech and corporate clients rose 69% to £21.3 million.

Geographic expansion continues. CAB has established its Abu Dhabi office, secured a licence for a representative office in Guyana and received Board approval for offices in Nigeria and Côte d'Ivoire. Its New York and Amsterdam operations are also developing their pipelines.

The stablecoin strategy remains at an earlier stage. CAB is selecting partners, testing an off-ramp liquidity solution and has submitted an application to extend its Abu Dhabi Global Market permissions. This could become an additional growth opportunity, but commercial income from the proposition was not disclosed.

The first dividend changes the shareholder story

CAB declared an interim dividend of 2.1p per share, representing approximately 40% of adjusted first-half profit after tax. It is due to be paid on 10 September 2026 to shareholders on the register on 14 August.

The new framework targets a Common Equity Tier 1, or CET1, ratio of between 16.5% and 17.5%. CET1 is a key measure of a bank's highest-quality loss-absorbing capital. CAB's ratio stood at 21.7% after accounting for the dividend, leaving capital above the top of its target range.

Management will consider internal growth investment and potential acquisitions first. It intends to allocate 8% to 12% of annual income to capital expenditure, establish a progressive dividend growing at a mid-single-digit annual rate from 2027, and return remaining surplus capital through buybacks or special dividends over time.

All distributions remain dependent on prudent capital headroom and any required regulatory or shareholder approvals.

What investors should watch in the second half

There is plenty to like in these figures. Income growth is broad, emerging-market activity is expanding and margins have improved substantially. The introduction of a dividend also suggests management has increasing confidence in CAB's cash generation and capital position.

However, the half benefited from favourable trading conditions and elevated market volatility. Emerging-market take rates reduced between the first and second quarters as conditions began to normalise. Total foreign exchange and payment volumes were also 7% below the seasonally stronger second half of 2025.

Currency concentration is another point to monitor. CAB's five largest currencies generated 38% of total income, up from 32% for 2025, although this remained below the roughly 50% peak recorded in 2023.

The Abu Dhabi rollout has also been slowed by regional conflict, and CAB expects further advisory costs relating to the Helios Consortium's unrecommended takeover offer. The independent Board continues to reject that offer, arguing that it undervalues the business, and has advised shareholders to take no action.

Guidance remains intact after a strong half

CAB reiterated its medium-term target for high-teens to low-twenties compound annual growth in total income excluding deposit net interest income. It also expects continued positive operating leverage and further surplus capital generation.

Compared with CAB Payments' H1 2025 update, the latest numbers show a material improvement in earnings, efficiency and shareholder distributions.

The main question now is whether higher client volumes and new mandates can compensate as unusually supportive take rates normalise. If CAB can continue growing income faster than costs without becoming more concentrated, the new capital return policy gives investors an additional way to participate in that progress.