PRESS RELEASE
Secure Trust Bank PLC
LEI: 213800CXIBLC2TMIGI76
25
January 2024
For
immediate release
SECURE TRUST BANK
PLC
Pre-Close Trading
Update
Net loan book grows
13.6%
Secure Trust Bank PLC ("Secure Trust
Bank", "STB" or the "Group"), a leading specialist lender, is
pleased to announce its pre close trading update for the fourth
quarter ended 31 December 2023. The Group continues to trade in
line with management expectations, with a significant increase to
year-on-year underlying profits before tax and
impairments.
Highlights
· Net
lending grew by 13.6% in the year to £3.3bn, a significant step
towards our £4bn ambition as presented at our November 2023 Capital
Markets Day.
· All
four specialist lending businesses delivered record levels of new
lending in 2023. Net interest margin was in
line with H1 2023.
· The
strong loan book growth led to an improvement in the cost income
ratio.
· We
remain on track to deliver £5m in total annualised savings from our
cost optimisation programme in 2024.
|
Q4 2023
|
Q3 2023
|
Change
|
Q4 2022
|
Change
|
Net lending
|
£3,315.3
|
£3,212.2
|
3.2%
|
£2,919.5
|
13.6%
|
New business lending
|
£579.3
|
£578.7
|
0.1%
|
£444.6
|
30.3%
|
Deposits
|
£2,866.8
|
£2,717.1
|
5.5%
|
£2,514.6
|
14.0%
|
Net
lending
The customer loan book grew by 3.2%
in the quarter and 13.6% compared to Q4 2022. All business areas
recorded growth in the fourth quarter, notably with Real Estate
Finance growing by 3.1% following a flat third quarter and by 11.5%
compared to Q4 2022. Consumer Lending grew by 3.2% in the quarter
and by 18.4% compared to Q4 2022.
New
business
Total new business lending was
broadly flat in the quarter and increased 30.3% compared to Q4
2022. Business Finance saw a 13.6% reduction on Q3 2023,
following a very strong third quarter for Commercial Finance, but
still 287% growth on Q4 2022. Consumer Finance recorded new
business lending volumes of £0.4bn in the quarter which reflects a
7.1% increase on Q3 2023 and a 2.3% increase on Q4 2022.
Deposits
The Group has continued to attract
deposits from a price competitive market. Customer deposits were
5.5% higher at the end of the quarter and 14.0% higher than Q4
2022.
Regulatory initiatives - Vehicle Finance
We note the FCA's recent
announcement about discretionary motor finance commissions. We
operated some discretionary commission arrangements until
2017. From 2014 to 2017, a mid-single digit proportion of our
new vehicle finance loans included such arrangements. The FCA plans
to set out its next steps in Q3 2024, when the implications for the
industry should become clearer. We will provide further information
to the market on these developments as appropriate.
Separately, during H2 2023 we engaged
in formal discussions with the FCA about our collections processes,
procedures and policies in Vehicle Finance. This follows the FCA's
review of Borrowers in Financial Difficulty (BiFD) across the
industry. We have engaged external support to assist us with this
review and, where necessary, are enhancing our approach. We
currently expect the review to conclude by the end of H1
2024.
David McCreadie, Chief Executive Officer,
said:
"We have delivered another strong
underlying performance in 2023 with excellent progress made in
growing our net lending balances and delivering cost efficiency
improvements. We have been operating in a challenging
economic environment for a prolonged period. Our business model has
proven to be resilient, and we have continued to make significant
progress in delivering our strategic plans.
"I am cautiously optimistic that
inflation will continue to fall and that stable lower interest
rates will follow leading to a less volatile trading environment.
We remain focused on delivering positive outcomes for all of our
customers and delivering products and services that meet their
needs."
Enquiries:
Secure Trust Bank PLC
David McCreadie, Chief Executive
Officer
Rachel Lawrence, Chief Financial
Officer
Phil Clark, Investor
Relations
Tel: 0121 693 9100
Investec Bank plc (Joint Broker)
Bruce Garrow
David Anderson
Maria Gomez de Olea
Tel: +44 (0) 20 7597 5970
Shore Capital Stockbrokers (Joint Broker)
Mark Percy / Angus Murphy (Corporate
Advisory)
Guy Wiehahn (Corporate
Broking)
Tel: +44 (0)20 7408 4090
Camarco
Ed Gascoigne-Pees,
Geoffrey Pelham-Lane, Sean
Palmer
securetrustbank@camarco.co.uk
Tel: 07591
760844
The person responsible for the
release of this announcement on behalf of STB is Mark Stevens,
Company Secretary.
Forward looking
statements
This announcement contains
forward-looking statements about the business, strategy and plans
of STB and its current objectives, targets and expectations
relating to its future financial condition and performance.
Statements that are not historical facts, including statements
about STB's or management's beliefs and expectations, are
forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future.
STB's actual future results may differ materially from the results
expressed or implied in these forward-looking statements as a
result of a variety of factors. These include economic and business
conditions, risks from failure of clients,
customers and counterparties, market related risks
including interest rate risk, risks regarding market conditions
outside STB's control, expected credit losses in certain scenarios
involving forward looking data, operational risks, legal,
regulatory, or governmental developments, and
other factors. The forward-looking statements contained in this
announcement are made as of the date of this announcement, and
(except as required by law or regulation) STB undertakes no
obligation to update any of its forward-looking
statements.
About STB
Secure Trust Bank is an established,
well‐funded and capitalised UK retail bank with a 71 year trading
track record. Secure Trust Bank operates principally from its head
office in Solihull, West Midlands, and had 868 employees (full‐
time equivalent) as at 31 December 2023. The Group's diversified
lending portfolio currently focuses on two sectors:
(i)
Business Finance through its Real Estate Finance
and Commercial Finance divisions,
(ii)
Consumer Finance through its Vehicle Finance and
Retail Finance divisions.
Secure Trust Bank PLC is authorised
by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation
Authority.
Secure Trust Bank PLC, Yorke House,
Arleston Way, Solihull, B90 4LH.