REG - Secure Trust BankPLC - Capital Markets Event

Secure Trust BankAnnouncement

03/07/2024 07:30

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RNS Number : 8820U  Secure Trust Bank PLC  03 July 2024

3 July 2024

 

Secure Trust Bank PLC

 

Capital Markets Event - Deep dive on Real Estate Finance

 

Secure Trust Bank PLC ("Secure Trust Bank" or the "Group"), a leading
specialist lender, will host an investor event today and will provide an
update on its Real Estate Finance business and how this business supports the
Group in achieving its medium-term financial targets as set out in its capital
markets day on 8 November 2023.

 

Real Estate Finance:  A tailored specialist property lender

 

Over the last decade, Real Estate Finance has achieved significant growth,
maintained low levels of cost of risk and delivered significant operational
leverage by taking advantage of its significant sector expertise.

 

Geoff Ray (Managing Director, Real Estate Finance), John Griffin (Regional
Head, London & South East) and Chris King (Head of Credit) will provide
details of their strong track record and the strategic repositioning of the
Real Estate Finance business to focus on lower risk residential investment
loans, which represented 84% of the Real Estate Finance net lending book at
the end of 2023.

 

Growth track record

 

Real Estate Finance is celebrating its 10(th) year and has grown net lending
balances every year since launch.  Lending balances grew from £1,052 million
in 2020 to £1,244 million at the end of 2023, representing 18% total
growth.  The management team will provide details on the reasons behind this
success and the opportunities for further growth, including the strategic
evolution in the portfolio mix towards residential investment loans and how
their market expertise and bespoke relationship driven approach is valued by
clients.

 

Specialist, relationship-led lending

 

Real Estate Finance has adopted a 'through the cycle' underwriting approach
that its professional clients appreciate.  The power of the relationship
model has seen new lending to existing clients increase from 36% in 2021 to
71% in 2023, with reliance on new lending origination from brokers declining
from 42% to 7% over the same period.  This retention model has the benefit of
reduced cost of customer acquisition and greater knowledge of customers' risk
profiles.

 

Improved lending quality and low cost of risk

 

The business has maintained its credit underwriting discipline while
delivering strong growth. The portfolio's loan to value has remained
consistent since launch and was 57% at the end of 2023.  Cost of risk has
averaged 16 basis points since 2014, despite the volatile macro-economic
backdrop for the real estate market and the rapid increase in the Bank of
England base rate more recently.

 

Cost efficiency - Operational leverage

 

Costs have been tightly controlled while the business has seen robust growth
in the loan book. Year-end staff numbers (full-time equivalents) decreased
from 55 in 2019 to 49 in 2023, reflecting the operational leverage in the
business.

 

 

Geoff Ray, Managing Director, Real Estate Finance, said:

 

"Secure Trust Bank's Real Estate Finance business has a long-term track record
of delivering growth in tailored specialist property lending.  The business
has increased its loan book by 18% in the last 3 years and we have an ambition
to drive a similar level of loan book growth in the medium term.

 

The strategic repositioning of our business towards the residential investment
market has allowed us to deliver attractive risk adjusted returns for the
Group through capital efficiency, given attractive pricing and lower risk
weighted assets."

 

David McCreadie, Chief Executive Officer, said:

 

"Secure Trust Bank continues to deliver on its strategic priorities across all
our specialist lending businesses. The information that will be provided at
our Capital Markets Event will provide insight into our Real Estate business
and highlight the capability of this team as they continue its growth
trajectory.

 

I remain confident in our ability to deliver the Group's £4 billion loan book
ambition that will unlock our 14-16% return on average equity target."

 

Capital Markets Event details

 

A live webcast of the presentation and slides will be available at the
following link today at 2.00 p.m.:

 

https://brrmedia.news/STB_CMD_24 (https://brrmedia.news/STB_CMD_24)

 

The Group will announce its interim results to 30 June 2024 on Wednesday, 14
August 2024.

 

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 / Sophie Collins (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 (mailto:securetrustbank@camarco.co.uk)

Tel: +44 (0)7591 760844

 

About Secure Trust Bank:

 

Secure Trust Bank is an established, well‐funded and capitalised UK retail
bank with over 70‐years of trading history. Secure Trust Bank operates
principally from its head office in Solihull, West Midlands, and has 897
employees (full‐time equivalent) as at March 2024. 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, Yorke House, Arleston Way, Solihull, B90 4LH.

 

 

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