REG - Secure Trust BankArbuthnot Banking - Half Yearly Report <Origin Href="QuoteRef">ARBB.L</Origin> <Origin Href="QuoteRef">STBS.L</Origin>
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Secure Trust Bank PLC
22 July 2014
PRESS RELEASE
Tuesday 22 July 2014
For Immediate Release
SECURE TRUST BANK PLC
Interim results for the six months to 30 June 2014
Positive momentum and record profits
Secure Trust Bank PLC ("Secure Trust Bank" or the "Company") is pleased to
announce half year results for the six months to 30 June 2014. The Company has
traded strongly during H1 2014 achieving underlying profit before tax of
£15.2m, up 48% compared with the same period last year. The benefits of its
previous acquisitions, strong controlled growth in the lending book and the
entry into SME markets have contributed to a new record level of underlying
profit.
FINANCIAL HIGHLIGHTS
· Operating income £43.8m (H1 2013: £36.3m)
· Underlying* profit before tax £15.2m (H1 2013: £10.3m) representing
growth of 48%
· Reported profit before tax £11.4m (H1 2013: £6.2m) representing growth
of 84%
· Capital ratios, liquidity and funding positions remain strong
· Underlying* annualised return on average equity 39.8% (H1 2013
annualised: 33.3%)
· Earnings per share 53.6p (H1 2013: 30.5p)
· Underlying* earnings per share 73.8p (H1 2013: 50.4p)
· Interim dividend per share of 16p, a 7% increase (H1 2013: 15p)
OPERATIONAL HIGHLIGHTS
· Overall loan book increased to £447.8m; a 22% increase on H1 2013:
£365.8m
· Customer deposits increased to £476.8m; a 23% increase on H1 2013:
£386.7m
· Total customer numbers increased to 391,610; a 20% increase on H1 2013:
325,052
· Impairments remain below levels expected at origination
· Real Estate Finance team established with a substantial pipeline of
business opportunities being worked on
· Invoice Finance executive team recruitment completed, testing of the
operating platform is progressing and business due to commence during Q3
· Successful completion of fund raising increased capital resources by
77%
* Before acquisition costs (2014: £0.2m; 2013: £0.3m), fair value adjustments
(2014: £2.7m; 2013: £2.7m), costs associated with share based payments (2014:
£0.8m; 2013: £1.0m) and Arbuthnot Banking Group management charges (2014:
£0.1m; 2013: £0.1m). All numbers quoted are before tax and relate to the six
months ended 30 June.
Henry Angest, Chairman, said:
"Secure Trust Bank has continued to implement its strategy of providing simple
straightforward banking solutions to customers, whilst remaining true to its
philosophy of managing the bank's balance sheet on a prudent basis. The
improving economic environment, the better than expected performance of the
existing lending activities, and the increased capital resources following the
recent successful placing provide strong foundations for the bank to diversify
into attractive SME markets and give us confidence for continued growth of the
business in the second half."
Paul Lynam, Chief Executive Officer, said:
"Our robust results for H1 2014 clearly demonstrate the growth potential of
the 'challenger banks' sector and Secure Trust Bank in particular. As the
economy recovers, we have written record levels of new loans, without
compromising our standards. This growth in lending balances, coupled with
lower levels of impairments and tight control of costs has resulted in a new
record for underlying profits for the six month period.
The performance and continued growth of our consumer finance portfolios is
encouraging and the recent successful completion of a substantial capital
raise means we can now diversify into SME lending activities in a meaningful
way, building on the expertise and experience that the bank has in this
sector. We have continued to position the bank to capitalise on the
significant opportunities available to it, in a controlled and prudent manner,
and we look forward to the future with confidence."
This announcement together with the associated investors' presentation are
available on www.securetrustbank.com/general/results-presentations.
Enquiries:
Henry Angest, Non-Executive Chairman
Andrew Salmon, Non-Executive Director
Tel: 020 7012 2400
Paul Lynam, Chief Executive Officer
Neeraj Kapur, Chief Financial Officer
Tel: 0121 693 9100
David Marshall, Director of Communications
Tel: 020 7012 2400
Canaccord Genuity Limited (Nominated Adviser)
Lawrence Guthrie
Sunil Duggal
Tel: 020 7665 4500
Canaccord Genuity Limited (Broker)
Roger Lambert
Lucy Tilley
Tel: 020 7523 8000
Oriel Securities Limited (Broker)
Robin Mann
Gareth Hunt
Tel: 020 7710 7600
Bell Pottinger
Ben Woodford
Dan de Belder
Tel: 020 7861 3232
Chairman's statement
Secure Trust Bank has maintained its positive momentum with a strong overall
business performance in the first half of 2014. Underlying profit before tax
was 48% higher at £15.2 million and reported profit before tax for the period
is £11.4 million, which is 84% higher than the prior year's £6.2 million.
We continue to manage the bank's balance sheet on a prudent basis. Our funding
and capital positions remain strong and our gross leverage ratio is very
modest compared to the larger banks. Given the existing capital ratios are
strong, the new capital raised following the recent placing is available to
support accelerated growth in the bank's lending activities.
Banks with clean balance sheets, strong capital and funding positions, and
free of legacy or emerging conduct risk issues, are well positioned to benefit
from a sustained UK economic recovery. Our Board is of the view that demands
for consumer and SME finance will continue to grow as the UK economy increases
in size. Therefore our business strategy is to foster the growth and extension
of our existing consumer finance lending activities whilst developing SME
business lines initially focused in Invoice Finance, Asset Finance and Real
Estate Finance activities.
The growth of GDP, continuing low inflation and record numbers of people in
employment bode well for the UK economy. However, there are risks posed from
an expected rise in interest rates, the recent US growth downgrade, rising
Middle East tensions and the political uncertainty in the UK ahead of the 2015
general election. Overall we are, on balance, optimistic about the future and
expect to see continued growth in the business in the second half of 2014. We
will, as ever, continue to exercise due caution.
As a result of the strong first half performance the Board proposes to pay an
interim dividend of 16p per share in respect of the six months ended 30 June
2014, representing a 7% increase on last year's interim dividend (2013: 15p).
This will be paid on 19 September 2014 to shareholders on the register at 22
August 2014.
Chief Executive's statement
I am delighted to be able to report further good progress across Secure Trust
Bank during the first half of 2014.
We have achieved record levels of underlying profitability without
compromising our risk principles. We have recruited additional high quality
senior management to support the controlled growth of the bank and the
continuing development of our new SME lending businesses. The ongoing demand
for our existing lines of business and the nascent SME activities means that
we expect to see further growth in the business in the second half of 2014.
Disciplined management of the balance sheet and cost base
The bank's capital and funding positions remain healthy.
The very strong capital generation arising from our profitability enables us
to support robust levels of new lending growth and pay progressive dividends,
whilst increasing our Common Equity Tier one ratio to 17.3% as at 30 June 2014
compared to the 17.0% for the same period last year on a like-for-like
analysis taking out the new capital raised by the recent placing. Once this
new capital is factored in, the bank's Common Equity Tier one ratio rises to
31%, making us one of the most strongly capitalised banks in the UK and
providing capacity for further growth.
Consistent with the Basel III directive, in 2015 the Prudential Regulation
Authority is introducing a minimum 3% leverage ratio disclosure requirement.
As at 30 June 2014 Secure Trust Bank's leverage ratio was 10.4% (excluding new
capital raised at the recent placing), or over 3x the minimum requirement. In
recent months there has been speculation that the Bank of England and European
Banking Authority would follow the Swiss example and increase this minimum
leverage to 4% and on 11 July 2014 the UK's Financial Policy Committee
published a consultation paper reviewing the leverage ratio, the outcome of
which is due in November 2014. Any moves by the regulator to increase capital
requirements may give rise to further opportunities for the Company.
Secure Trust Bank has continued to fund its lending activities wholly from
customers' deposits. Our loan to deposit ratio stood at 94% as at 30 June 2014
which compares to 90% as at 31 December 2013. The bank has made minimal usage
of the Funding for Lending Scheme and has no reliance on wholesale or
interbank markets. The bank has continued broadly to match fund its customer
lending with customer deposits. This strategy seeks to mitigate maturity
transformation and interest basis risks. Customer demand for our deposit
products remains strong and we are very pleased with the high level of
customer loyalty and the reinvestment levels seen from customers with maturing
medium term savings bonds.
We have exercised firm control over the bank's operational costs, whilst
continuing to invest for the future. On a like-for-like basis costs are up 19%
over the same period in 2013, whilst total income is 21% ahead.
Lending activities
Our lending activities continue to see significant demand from a wide variety
of customers. The volume of new loans written in H1 2014 was £201.3m
representing a 33% increase on the £151.2m for the same period last year.
The portfolio continues to be robustly controlled and we have not compromised
our acceptance criteria or lending standards to achieve net growth. This
approach has, in part, contributed to impairments being at levels below our
expectations when we originated the loans. As the overall portfolio matures we
expect to see, and have priced for, higher impairment levels than we are
currently experiencing.
Total lending balances, net of provisions, have increased to £447.8 million as
at 30 June 2014. This represents growth of 22% since 30 June 2013 (£365.8
million) and 15% growth from the 31 December 2013 position of £391.0 million.
Motor Finance balances have grown to £127.8 million from £104.8 million a year
ago and £114.7 million as at 31 December 2013 representing 22% and 11% growth
respectively.
Personal unsecured lending balances, excluding Everyday Loans, have grown to
£84.1 million from £72.7 million a year ago and £77.8 million as at 31
December 2013 representing 16% and 8% growth respectively.
Everyday Loans lending balances have grown to £85.3 million from £79.4 million
a year ago and £81.4 million as at 31 December 2013 representing 7% and 5%
growth respectively.
This time last year I flagged the investment we intended to make into our
Retail Finance business. I am pleased to report that this has borne fruit as
evidenced by a number of successes which have helped to fuel 24% growth
year-on-year in lending balances. Total new lending volumes for H1 2014 are
39% higher than the same period in 2013. The diversification into new markets
has gone well with a dozen top football clubs now using V12 to provide their
season ticket finance. A number of rugby clubs and the Welsh Rugby Union have
also signed up. We continue to enjoy excellent commercial relationships with
the Association of Cycle Traders and Creative United (formerly the Arts
Council England). The Association of Cycle Traders have renewed their term
contract with us.
Retail Point of Sale balances have grown to £134.3 million from £107.9 million
a year ago and £114.4 million as at 31 December 2013 representing 24% and 17%
growth respectively.
We began the recruitment of specialist Real Estate Finance bankers in the
first quarter of 2014, and this process continues as we target specific
individuals to augment the team. The demand for lending has been much stronger
than we expected. The team have already built a very substantial work in
progress pipeline in only four months and over £70 million of customer limits
have been conditionally extended. The portfolio is biased towards short term
development finance, typically for house building. As such we expect to see
the lending balances in this area grow steadily as the underlying building
developments progress. As at 30 June 2014 Real Estate Finance lending balances
have grown to £12.5 million from £nil a year ago and £1.8 million as at 31
December 2013.
Fee based services
The OneBill service remains closed for new business. Customer numbers continue
to reduce in line with management expectations and ended the period at
23,386.
In 2013 HM Treasury announced the creation of a new Payments Regulator with
effect from 1 April 2015. It is unclear whether this change will improve the
economics of providing a current account product. We have therefore continued
to focus management attention elsewhere pending clarification of the new
regulator's intentions. The current account product does not make any
meaningful contribution to Secure Trust Bank's profits. Notwithstanding the
moderation of new business development activity, customer numbers are 21,840,
only 2% lower than the same period in 2013.
Strong customer relationships and ethics
Our ongoing focus on providing simple, straightforward banking solutions
remains very popular with customers. Customer satisfaction levels, as measured
by the independent FEEFO customer feedback forum, are constantly in the
90-100% satisfaction levels. Customer numbers continue to grow and are over
20% higher than this time last year at 391,610 (2013: 325,052).
We are carrying out increasing amounts of repeat business with borrowers who
have satisfactorily repaid us in the past and the level of 'stickiness' within
our deposit customers is very high. We make a very deliberate effort to ensure
that the design of our products ensures that customers get a positive outcome
and are treated fairly. For example, over 40% of our customer deposits are in
the form of fixed term fixed rate bonds. Prior to these maturing we write to
customers offering an exclusive rollover rate, which is in the top quartile of
the market rates. We believe our approach underpins the high customer
satisfaction levels we achieve and is conducive to building long term
relationships, differentiating us positively.
Our customer-friendly principles are informing the design of the products we
will use to meet the needs of SME customers, and we believe this, coupled with
the quality of our service delivered through the quality of our staff will
give us an edge in the SME markets.
Investing for the future
Our motor finance, retail finance and personal unsecured lending activities
have driven the growth in profits in recent years. We see considerable ongoing
potential in these markets, in addition to significant opportunities in SME
markets. In order to ensure that our growth continues to be professionally and
prudently managed we have maintained our investment in the senior management
and infrastructure capabilities of the bank.
In the first half of 2014, we hired a highly experienced Chief Technology
Officer with experience of larger banking businesses to ensure that our
operational platform is developed in an appropriate and secure manner. We also
recognised that as the Company grows in scale and broadens its range of
products, our Treasury activities will become increasingly important. We have
therefore recruited a proven, and suitably qualified, Corporate Treasurer who
joined us in June.
In order to take our Motor Finance proposition to the next level, in Q2 2014
we appointed a Managing Director with a proven track record in the motor
industry who is currently developing a new strategic plan for this important
lending area within Secure Trust Bank.
I am delighted to note that in the first quarter of 2014 Secure Trust Bank
received the 'Investors in People Silver' status accreditation. This ranks us
in the top 6.5% of all UK businesses covered by Investors in People. I believe
this is a great reflection on the ongoing investment the bank is making in its
people who do such an excellent job looking after all of our customers.
SME update
Considerable progress has been made with our plans to build a de novo Invoice
Finance division. The key to success in this market is centred on the quality
of the staff, the quality of the customer proposition, the capabilities of the
operating platform and the risk control and monitoring procedures of the
business. We previously announced that an ex Managing Director of Barclays
Invoice Finance division has been recruited to run Secure Trust Bank
Commercial Services. We have also recruited an excellent team of executives
and regional sales directors. The operating platform is largely built and is
currently in its test phase. We expect this to be operational later in July
and the sales and relationship/risk staff are scheduled to join us from
August.
I am also pleased to announce that we have recruited Paul Marston to run our
SME and Asset Finance activities. Paul holds Banking and Treasury
qualifications, and joins us from RBS where he was latterly a Managing
Director, Commercial Banking. Paul was responsible for the UK SME leasing and
asset finance activities of Lombard North Central PLC for a number of years
before re-entering the core RBS banking business in 2009.
Outlook
We were very pleased to complete the recent share placing in a difficult
market at only a 3.8% discount to the pre-issue closing price. The placing has
significantly boosted our capital resources and, consistent with their
undertaking at the IPO, Arbuthnot Banking Group has continued to reduce its
ownership stake. The increase in the free float to 47% and the ongoing growth
strategy of the Company positions us well to seek promotion from AIM to the
main market in due course. The net proceeds raised in the recent placing of
£48.8 million will be used to support the growth of the Company.
In June the British Bankers Association (BBA) held their annual conference
with this year's theme being 'Competition in UK Banking'. I am pleased to note
that this industry body has adopted as its stance the call for the three
changes the Chairman called for in his statement in the 2013 annual accounts.
At the BBA conference the City minister, Andrea Leadsom and her shadow
minister, Cathy Jamieson, both acknowledged the absence of a level playing
field and the need for government action to address the capital, funding and
access to payments infrastructure that disadvantages the small banks and means
they suffer relative to the dominant incumbents. I expect that we will hear a
lot more on these subjects in the run up to the 2015 UK general election.
If action is taken on some of the current regulatory bias against smaller
banks then so much the better. We are not, however, reliant on this to enable
us to progress our strategic plans. The steps we have taken and continue to
take to broaden our distribution channels and products, coupled with strong
organic demand from a wide variety of customers, are all encouraging factors.
The nascent SME business is showing considerable promise albeit investors will
appreciate that the growth of this business will require an initial period of
investment until it can achieve critical mass. In addition we continue to
explore a wide range of external opportunities which could allow us to
accelerate our growth plans. With the economic recovery looking increasingly
entrenched we believe that the manner and timing of our entry into new markets
is appropriate and we look forward to the future with confidence.
Consolidated statement of comprehensive income
Six months ended 30 June
2014 2013
Note £million £million
Interest receivable and similar income 41.6 34.1
Interest expense and similar charges (7.2) (6.6)
Net interest income 34.4 27.5
Fee and commission income 11.2 11.1
Fee and commission expense (1.8) (2.3)
Net fee and commission income 9.4 8.8
Operating income 43.8 36.3
Net impairment losses on loans and advances to customers (6.4) (7.6)
Operating expenses (26.0) (22.5)
Profit before income tax 11.4 6.2
Income tax expense (3.0) (1.4)
Profit for the period 8.4 4.8
Other comprehensive income, net of income tax:
Revaluation reserve
- Net amount transferred to profit or loss - (0.1)
Cash flow hedging reserve
- Net amount transferred to profit or loss 0.4 -
Other comprehensive income for the period, net of income tax 0.4 (0.1)
Total comprehensive income for the period 8.8 4.7
Profit attributable to:
Equity holders of the parent 8.4 4.8
Total comprehensive income attributable to:
Equity holders of the parent 8.8 4.7
Earnings per share for profit attributable to the equity holders of the parent during the period
(expressed in pence per share):
Basic earnings per share 3 53.6 30.5
Diluted earnings per share 3 51.4 30.5
Consolidated statement of financial position
At 30 June
2014 2013
Note £million £million
Assets
Loans and advances to banks 4 102.4 69.1
Loans and advances to customers 447.8 365.8
Property, plant and equipment 4.9 5.3
Intangible assets 9.2 10.6
Deferred tax assets 0.6 4.7
Other assets 4.5 8.9
Total assets 569.4 464.4
Liabilities and equity
Liabilities
Deposits from banks - 0.1
Deposits from customers 476.8 386.7
Current tax liabilities 1.4 0.6
Deferred tax liabilities 0.6 1.9
Other liabilities 27.3 21.1
Total liabilities 506.1 410.4
Equity attributable to owners of the parent
Share capital 6.3 6.3
Share premium 28.2 28.2
Retained earnings 28.6 19.7
Cash flow hedging reserve - (0.4)
Revaluation reserve 0.2 0.2
Total equity 63.3 54.0
Total liabilities and equity 569.4 464.4
Consolidated statement of changes in equity
Share capital Share premium Revaluation reserve Cash flow hedging reserve Retained earnings Total
£million £million £million £million £million £million
Balance at 1 January 2014 6.3 28.2 0.2 (0.4) 27.3 61.6
Total comprehensive income for the period
Profit for the six months ended 30 June 2014 - - - - 8.4 8.4
Other comprehensive income, net of income tax
Cash flow hedging reserve
- Net amount transferred to profit or loss - - - 0.4 - 0.4
Total other comprehensive income - - - 0.4 - 0.4
Total comprehensive income for the period - - - 0.4 8.4 8.8
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Final dividend relating to 2013 - - - - (7.4) (7.4)
Equity settled shared based payment transactions - - - - 0.3 0.3
Total contributions by and distributions to owners - - - - (7.1) (7.1)
Balance at 30 June 2014 6.3 28.2 0.2 - 28.6 63.3
Share capital Share premium Revaluation reserve Cash flow hedging reserve Retained earnings Total
£million £million £million £million £million £million
Balance at 1 January 2013 6.3 28.2 0.1 (0.4) 21.7 55.9
Total comprehensive income for the period
Profit for the six months ended 30 June 2013 - - - - 4.8 4.8
Other comprehensive income, net of income tax
Revaluation reserve
- Net amount transferred to profit or loss - - 0.1 - (0.1) -
Total other comprehensive income - - 0.1 - (0.1) -
Total comprehensive income for the period - - 0.1 - 4.7 4.8
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Final dividend relating to 2012 - - - - (6.7) (6.7)
Total contributions by and distributions to owners - - - - (6.7) (6.7)
Balance at 30 June 2013 6.3 28.2 0.2 (0.4) 19.7 54.0
Consolidated statement of cash flows
Six months ended 30 June
2014 2013
£million £million
Cash flows from operating activities
Profit for the six months 8.4 4.8
Adjustments for:
Income tax expense 3.0 1.4
Depreciation of property, plant and equipment 0.2 0.3
Amortisation of intangible assets 1.2 1.2
Loss on sale of property, plant and equipment 0.1 -
Impairment losses on loans and advances 6.4 7.6
Cash flow hedging reserve transferred to profit or loss 0.4 -
Equity settled share based payment transactions 0.3 -
Cash flows from operating profits before changes in operating assets and liabilities 20.0 15.3
Changes in operating assets and liabilities:
- net decrease in loans and advances to banks 7.8 51.3
- net increase in loans and advances to customers (63.2) (43.1)
- net decrease/(increase) in other assets 3.6 (1.3)
- net (decrease)/increase in amounts due to banks (0.1) 0.1
- net increase/(decrease) in amounts due to customers 40.2 (12.2)
- net increase in other liabilities 1.5 0.4
Income tax paid (1.5) (1.2)
Net cash inflow from operating activities 8.3 9.3
Cash flows from investing activities
Borrowings repaid on acquisition of subsidiary undertakings - (36.9)
Cash acquired on purchase of subsidiary undertakings - 1.6
Purchase of subsidiary undertakings - (3.9)
Purchase of property, plant and equipment (0.2) (0.1)
Purchase of computer software (0.5) (0.2)
Proceeds from sale of computer software - 2.0
Net cash outflow from investing activities (0.7) (37.5)
Cash flows from financing activities
Dividends paid (7.4) (6.7)
Net cash used in financing activities (7.4) (6.7)
Net increase/(decrease) in cash and cash equivalents 0.2 (34.9)
Cash and cash equivalents at 1 January 90.0 94.0
Cash and cash equivalents at 30 June 90.2 59.1
Notes to the consolidated financial statements
1. Operating segments
The Group is organised into four main operating segments, which consist of the
different products available, disclosed below:
1) Personal lending - Unsecured consumer loans sold to customers via brokers
and affinity partners.
2) Motor finance - Hire purchase agreements secured against the vehicle being
financed.
3) Retail finance - Point of sale unsecured finance for in-store and online
retailers.
4) Current account and OneBill - The current account comes with a prepaid card
to enable effective control of personal finances, whilst OneBill is an account
designed to aid customers with their household budgeting and payments
process.
Management review these segments by looking at the income, size and growth
rate of the loan books, impairments and customer numbers. Except for these
items no costs or balance sheet items are allocated to the segments.
Personal Lending Motor Finance Retail Finance Current Account and OneBill Other Group Total
Six months ended 30 June 2014 £million £million £million £million £million £million
Interest receivable and similar income 20.7 12.6 7.9 - 0.4 41.6
Fee and commission income 2.9 - 0.3 6.0 2.0 11.2
Revenue from external customers 23.6 12.6 8.2 6.0 2.4 52.8
Net impairment losses on loans and advances to customers 4.7 1.3 0.4 - - 6.4
Loans and advances to customers 169.5 127.8 134.3 0.3 15.9 447.8
Personal Lending Motor Finance Retail Finance Current Account and OneBill Other Group Total
Six months ended 30 June 2013 £million £million £million £million £million £million
Interest receivable and similar income 17.4 10.0 6.6 - 0.1 34.1
Fee and commission income 2.5 - - 6.3 2.3 11.1
Revenue from external customers 19.9 10.0 6.6 6.3 2.4 45.2
Net impairment losses on loans and advances to customers 4.9 1.9 0.8 - - 7.6
Loans and advances to customers 152.1 104.8 107.9 0.3 0.7 365.8
The "Other" segment above includes other segments which are individually below
the quantitative threshold for separate disclosure and fulfils the requirement
of IFRS 8.28 by reconciling operating segments to the amounts reported in the
financial statements.
As interest, fee and commission and operating expenses are not aligned to
operating segments for day-to-day management of the business and cannot be
allocated on a reliable basis, profit by operating segment has not been
disclosed.
All of the Group's operations are conducted wholly within the United Kingdom
and geographical information is therefore not presented.
2. Underlying profit reconciliation
The profit before tax as reported in the Consolidated Statement of
Comprehensive Income can be reconciled to the underlying profit for the year
as follows:
Six months ended 30 June
2014 2013 Variance
£million £million £million
Profit before tax 11.4 6.2 5.2
Acquisition costs 0.2 0.3
Acquisition fair value amortisation 2.7 2.7
Share based incentive scheme 0.8 1.0
Net ABG management recharges 0.1 0.1
Underlying profit before tax 15.2 10.3 4.9
Underlying tax (3.6) (2.4) (1.2)
Underlying profit after tax 11.6 7.9 3.7
Underlying basic earnings per share (pence) 73.8 50.4 23.4
3. Earnings per ordinary share
Basic
Basic earnings per ordinary share are calculated by dividing the profit
attributable to equity holders of the parent of £8.39 million (2013: £4.78
million) by the weighted average number of Ordinary Shares in issue during the
period 15,648,149 (2013: 15,648,149).
Diluted
Diluted earnings per ordinary share are calculated by dividing the profit
attributable to equity holders of the parent of £8.39 million (2013: £4.78
million) by the weighted average number of Ordinary Shares in issue during the
period, as noted above, as well as the number of dilutive share options in
issue during the period.
The number of dilutive shares in issue at the period-end was 673,328, being
based on the number of options granted of 920,831, the exercise price of £7.20
per option and the average share price during the period from 1 January to 30
June 2014 of £26.79. There were no dilutive share options in issue during the
period ended 30 June 2013.
4. Loans and advances to banks
Included within loans and advances to banks are amounts placed with Arbuthnot
Latham & Co., Limited, a related company, of £36.2 million (31 December 2013:
£31.6 million; 30 June 2013: £4.4 million).
5. Basis of reporting
The interim financial statements have been prepared on the basis of accounting
policies set out in the Group's 2013 Annual Report and Accounts as amended by
standards and interpretations effective during 2014 and in accordance with
IAS34 'Interim Financial Reporting'. The Directors of the Company do not
consider the fair values of the assets and liabilities presented in these
interim financial statements to be materially different from their carrying
values.
The statements were approved by the Board of Directors on 21 July 2014 and are
unaudited. The interim financial statements will be posted to shareholders
and copies may be obtained from The Company Secretary, Secure Trust Bank PLC,
One Arleston Way, Solihull, West Midlands, B90 4LH.
6. Events after the balance sheet date
On 19 June 2014 the Company announced a proposed placing to institutional
investors of 3,125,000 Ordinary Shares in aggregate, comprising 2,083,333 new
Ordinary Shares to be issued by Secure Trust Bank PLC and 1,041,667 existing
Ordinary Shares to be sold by the Company's parent company.
On 9 July 2014 the new and existing shares were placed at a price of £24.00
per share following approval of the Resolutions for the issue and allotment of
the new Ordinary Shares at a General Meeting. The placing of the new shares
raised £48.8 million, net of expenses, for Secure Trust Bank PLC, whilst the
shareholding of Ordinary Shares by the parent company post-placing reduced
from 67.0% to 53.3% of the new enlarged issued share capital.
This information is provided by RNS
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