REG - Secure Trust BankPLC - Q1 2023 Trading Update

Secure Trust BankAnnouncement

18/05/2023 07:00

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RNS Number : 7966Z  Secure Trust Bank PLC  18 May 2023

PRESS RELEASE

Secure Trust Bank PLC

LEI: 213800CXIBLC2TMIGI76

18 May 2023

For immediate release

SECURE TRUST BANK PLC

 

Q1 2023 Trading Update

Net Lending exceeds £3bn, 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 £3bn and our cost optimisation programme remains on track to
deliver £4m annualised savings by end of 2023.  Arrears across Consumer
Finance have remained stable at low levels.

 

Highlights

 

                          Q1'23       Q4'22       Change  Q1'22       Change
 New business lending(1)  £523.5m     £444.6m     17.7%   £488.2m     7.2%
 Net lending(1)           £3,013.3m   £2,919.5m   3.2%    £2,569.3m   17.3%
 Deposits                 £2,544.6m   £2,514.6m   1.2%    £2,190.1m   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

£3bn 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.

 

Deposits

We attracted £343m 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.

 

Capital

On 28 February 2023, the Group issued £90 million 13.0% Fixed Rate Callable
Subordinated Notes due 2033 which qualify as Tier 2 regulatory capital, and at
the same time £25 million of Fixed Rate Callable Subordinated Notes due 2028
were repurchased and cancelled. On 20 March 2023, the Group repurchased and
cancelled the remaining £25 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
£90m of new Tier 2 capital and subsequent buy-back of our existing £50m 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.

 

 

 

Enquiries:

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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