RNS Number : 7966Z

Secure Trust Bank PLC

18 May 2023


Secure Trust Bank PLC


18 May 2023

For immediate release


Q1 2023 Trading Update

Net Lending exceeds GBP3bn, well-placed for further growth

Secure Trust Bank PLC ("Secure Trust Bank", "STB" or the "Group"), a leading specialist lender, is pleased to announce its trading update for the first quarter ended 31 March 2023. Loan book growth momentum has continued, net lending exceeded GBP3bn and our cost optimisation programme remains on track to deliver GBP4m annualised savings by end of 2023. Arrears across Consumer Finance have remained stable at low levels.


                               Q1'23          Q4'22       Change      Q1'22      Change 
 New business lending(1)       GBP523.5m      GBP444.6m    17.7%     GBP488.2m     7.2% 
                           -------------  -------------  -------  ------------  ------- 
 Net lending(1)              GBP3,013.3m    GBP2,919.5m     3.2%   GBP2,569.3m    17.3% 
                           -------------  -------------  -------  ------------  ------- 
 Deposits                    GBP2,544.6m    GBP2,514.6m     1.2%   GBP2,190.1m    16.2% 
                           -------------  -------------  -------  ------------  ------- 

(1) Performance metrics relate to continuing operations as described on pages 2 and 130 of the 2022 Annual Report and Accounts

New business

Total new business lending increased by 17.7% in the quarter and 7.2% compared to Q1'22 demonstrating sustained growth momentum, despite tightened lending criteria. Business Finance delivered its strongest quarterly lending result since Q2'22 and Consumer Finance maintained a strong lending performance for the fourth successive quarter. Further market share gains were achieved in Retail Finance, rising to 11.9% from 11.4% as at December 2022 and Vehicle Finance remained stable at 1.1%.

Net lending

GBP3bn of net lending was achieved in the quarter, a significant milestone for the Group. The customer loan book grew by 3.2% in the quarter and 17.3% compared to Q1'22. Lending in Real Estate Finance grew by 4.3% as the pipeline from Q4'22 converted to new business. Commercial Finance balances marginally declined in the period. Vehicle Finance lending grew by 7.3% and Retail Finance by 3.5% in the quarter reflecting strong new business levels.


We attracted GBP343m of customer deposits in the quarter. Deposit balances were 1.2% higher at the end of the quarter, and 16.2% higher than Q1'22.


On 28 February 2023, the Group issued GBP90 million 13.0% Fixed Rate Callable Subordinated Notes due 2033 which qualify as Tier 2 regulatory capital, and at the same time GBP25 million of Fixed Rate Callable Subordinated Notes due 2028 were repurchased and cancelled. On 20 March 2023, the Group repurchased and cancelled the remaining GBP25 million of Fixed Rate Callable Subordinated Notes due 2028. This enlarged capital position provides significant opportunity for the Group to deliver further high-quality loan book growth.

David McCreadie, Chief Executive Officer, said:

"The Group has made a strong start to the year and is trading in line with management expectations. I am delighted that we completed the issuance of GBP90m of new Tier 2 capital and subsequent buy-back of our existing GBP50m Tier 2 capital due 2028. We see significant opportunity for sustainable growth in our focused market segments and are well positioned to help consumers and businesses fulfil their ambitions and to continue to grow our net lending and scale our business as we strengthen our distribution networks and relationships. I am pleased to confirm that we launched our AppToPay pilot at the end of April.

We continued to focus on delivering cost initiatives to help mitigate the impacts of inflation and expect to deliver a further improvement in the cost income ratio in 2023.

Although the economic environment remains uncertain, we have started the year positively and are confident in delivering on our plans for the full year and our medium term targets.


Secure Trust Bank PLC

David McCreadie, Chief Executive Officer

Rachel Lawrence, Chief Financial Officer

Phil Clark, Investor Relations

Tel: 0121 693 9100

Stifel Nicolaus Europe Limited (Joint Broker)

Robin Mann

Akshman Ori

Tom Marsh

Nicholas Harland

Tel: 020 7710 7600

Canaccord Genuity Limited (Joint Broker)

Emma Gabriel

Harry Rees

Tel: 020 7523 8309

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 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 STB's control, the COVID-19 pandemic, expected credit losses in certain scenarios involving forward looking data, any adverse experience in inherent operational risks, any unexpected developments in regulation or regulatory, 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 the Company

Secure Trust Bank is an established, well--funded and capitalised UK retail bank with a 70 year trading track record. Secure Trust Bank operates principally from its head office in Solihull, West Midlands, and had 855 employees (full-- time equivalent) as at 31 December 2022. The Group's diversified lending portfolio currently focuses on two sectors:

(i) Business Finance through its Real Estate Finance and Commercial Finance divisions, and

   (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, One Arleston Way, Solihull, B90 4LH.

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May 18, 2023 02:00 ET (06:00 GMT)

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