TIDMSTB
RNS Number : 8345C
Secure Trust Bank PLC
22 October 2020
PRESS RELEASE
Secure Trust Bank PLC
LEI: 213800CXIBLC2TMIGI76
22 October 2020
07.00am Embargo
SECURE TRUST BANK PLC
Q3 2020 Trading Update
Secure Trust Bank PLC and its subsidiaries ("Secure Trust Bank",
"STB" or the "Group") provide a trading update in relation to the
third quarter ended 30 September 2020.
As expected, the easing of the lockdown restrictions in June
2020 has resulted in a strong rebound in demand for the Group's
lending products. STB operated efficiently and effectively during
the third quarter, delivering high quality service to its customers
whilst continuing to trade profitably. Capital and Liquidity
positions remained strong with the Group benefitting from the low
rate environment by replacing maturing higher margin term deposits
with materially lower cost deposits. STB continued to pursue its
strategic objectives during the quarter and remains confident in
the significant opportunities in its chosen markets.
The Group is extremely grateful for the professionalism shown by
its staff during these continued trying circumstances and remains
committed to protecting staff and supporting customers and business
partners through the crisis.
Lending
The pickup in lending has been particularly evident in Retail
Finance where new business volumes are at near pre COVID levels,
notwithstanding the significant tightening of credit criteria
implemented during the first half of 2020. The Group is committed
to supporting its SME customers which is reflected in a circa 10%
increase in Invoice Finance lending balances compared to the
position as at 30 June 2020. Demand for the Group's Motor Finance
products has been strong during the third quarter: used car prices
have also held up well. The Group sees considerable opportunities
to grow its Motor Finance business. The prime Motor Finance
proposition for consumers was launched on 1 October 2020.
Repayment holidays in Motor Finance peaked mid-summer at 19.3%
of the customer base. As at 30 September only 0.9% of Motor Finance
customers had an active repayment holiday. Repayment holidays in
Retail Finance peaked at 2.6% of the customer base. As at 30
September only 0.7% of Retail Finance customers had an active
repayment holiday. Overall, the Group's lending portfolio is
performing in line with management's expectations. Given the
current and prospective uncertainties the Group will continue to
take a cautious approach to lending.
Outlook and strategy
The resilient operating and financial performance over the first
three quarters of 2020 means the Group is currently trading
significantly ahead of consensus profit before tax. As at 21
October 2020, the Group's compiled Full Year 2020 consensus was
GBP2.2m ranging from (GBP14.8) million to GBP9.7 million. As a
result the Group is well placed to navigate the remainder of the
year and beyond.
The short term focus of minimising COVID-19 related damage,
maximising the financial performance of the business and preserving
capital is unchanged. The Board is pleased with the performance to
date with Q3 performance being much stronger than expected. This
has been supported by a slowing in the rate of balance sheet
contraction and a faster reduction in the number of customers on
active payment holidays. While the Board is therefore encouraged by
current trading, it recognises that the continued impact of
Covid-19 on the UK economy generates potential uncertainty in the
near term and, as set out in the Company's interim results,
continues to review forward looking scenarios and appropriate IFRS
9 provisioning. The group is unable to resume market guidance due
to the continuing uncertainty.
Longer-term, the Group remains focused on its key strategic
priorities of organic growth in responsible lending across a
diverse portfolio of attractive segments, continued investment in
broadening our product offerings to customers, pursuing M&A
activity in line with our strategy, optimising our capital and
liquidity strategies and continuing to target delivery of profit
growth in the medium term to create shareholder value. The Board
believes that the changing competitive landscape and the material
fall in funding costs will create favourable conditions for growth
for STB as a well-capitalised and funded bank during the post-COVID
economic recovery, as was the case after the global financial
crisis.
Enquiries:
Secure Trust Bank PLC
Paul Lynam, Chief Executive Officer
Rachel Lawrence, Chief Financial Officer
Tel: 0121 693 9100
Stifel Nicolaus Europe Limited (Joint Broker)
Robin Mann
Gareth Hunt
Tel: 020 7710 7600
Canaccord Genuity Limited (Joint Broker)
David Tyrell
Tel: 020 7523 8000
Forward looking statements
This document contains forward looking statements with respect
to the business, strategy and plans of Secure Trust Bank PLC
("Secure Trust Bank", "STB" or the "Group") and its current goals
and expectations relating to its future financial condition and
performance. Statements that are not historical facts, including
statements about Secure Trust Bank 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. Secure Trust Bank'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 UK domestic and global economic and business conditions,
risks concerning borrower credit quality, market related risks
including interest rate risk, inherent risks regarding market
conditions and similar contingencies outside Secure Trust Bank's
control, any adverse experience in inherent operational risks, any
unexpected developments in regulation or regulatory and other
factors. The forward looking statements contained in this document
are made as of the date hereof, and Secure Trust Bank undertakes no
obligation to update any of its forward looking statements.
About the Company:
Secure Trust Bank is an established, well--funded and
capitalised UK retail bank with a 68 year trading track record.
Secure Trust Bank operates principally from its head office in
Solihull, West Midlands, and had 972 employees (full-- time
equivalent) as at 30 June 2020. The Group's diversified lending
portfolio currently focuses on two sectors:
(i) Business Finance through its Real Estate Finance, Asset
Finance and Commercial Finance divisions,
(ii) Consumer Finance through its Motor Finance, Retail Finance,
Debt Collection and Consumer Mortgages divisions
As at 30 June 2020 the Group's loans and advances to customers
totalled GBP2,377.5 million, customer deposits totalled GBP1,999.2
million and the Group's total customer base was well over 1.6
million.
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, One Arleston Way, Solihull, B90 4LH.
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