REG - Secure Trust BankPLC - Q3 2022 Trading Update

Secure Trust BankAnnouncement

27/10/2022 07:00

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RNS Number : 2587E  Secure Trust Bank PLC  27 October 2022

PRESS RELEASE

Secure Trust Bank PLC

LEI: 213800CXIBLC2TMIGI76

27 October 2022

For embargoed release at 07.00 am

SECURE TRUST BANK PLC

 

Q3 2022 Trading Update

 

Prudent management of lending growth

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014   as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018.

Secure Trust Bank PLC ("Secure Trust Bank", "STB" or the "Group"), a leading
specialist lender, is pleased to announce its trading update for the third
quarter ended 30 September 2022.  Positive momentum has continued in Q3 with
management taking pre-emptive prudent action to slow lending growth and focus
on operational efficiency.  Credit criteria have been proactively tightened
further to reflect macroeconomic uncertainty and management of the overall
risk profile of the lending book.  The Group continues to trade in line with
management's expectations.

 

Highlights

 

                        Q3'22       Q3'21       Change  Q2'22       Change

 Net Lending - Core*    £2,813.4m   £2,315.0m   21.5%   £2,751.2m   2.3%
 Deposits               £2,349.2m   £1,964.9m   19.6%   £2,290.9m   2.5%
 New business lending*  £502.1m     £368.4m     36.6%   £633.9m     (20.8)%

 

Net Lending - Core*

The Core net loan book grew by 21.5% compared to Q3 2021 and 2.3% compared to
Q2 2022. The Q3 2022 quarter-on-quarter growth was predominately delivered in
Consumer businesses of 6.4%, with Business Finance reducing by 1.2%.  Growth
slowed in the quarter following actions to tighten credit criteria and reduce
new business levels.

 

Deposits

Customer deposits were 2.5% higher at the end of the quarter compared to Q2
2022 to support the growth in the loan book. The Group continues to focus on
the management of funding costs in a steep rising rate environment and
preservation of Net Interest Margin which remained flat in Q3 2022 compared
with HY22 at 5.7%.

 

New Business lending*

Total new business lending grew significantly year-on-year with market share
gains across our Consumer businesses reflecting a recovery from COVID.  As
expected, new business lending decreased in the quarter by 20.8% compared to
Q2 2022 reflecting the continued proactive tightening of credit criteria given
the current macroeconomic environment.

 

David McCreadie, Chief Executive Officer:

"We have continued to support our customers and business partners during this
period of market uncertainty and are pleased with our operational performance,
progress on our strategic targets and further improvements in operational
efficiency. Against a backdrop of rising inflation and interest rates we have
taken decisions to slow the growth rate of lending.  We will continue to
adopt a flexible approach to loan book growth across our diversified portfolio
and a prudent approach to risk management. Our track record of navigating
economic uncertainties gives us confidence in managing through this
challenging period and being well positioned to take advantage of growth
opportunities when the economic backdrop improves. Secure Trust Bank remains
well positioned to capitalise on its strong foundations in its Core specialist
lending markets and to deliver its medium-term targets."

 

*Following the simplification of our lending activities, 'Core' excludes the
Asset Finance and Consumer Mortgages loan books which were disposed of in July
2021 and the Debt Managers (Services) loan portfolio disposed of in May 2022.

 

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

Stewart Wallace

Tel: 020 7710 7600

 

Canaccord Genuity Limited (Joint Broker)

Emma Gabriel

Tel: 020 7523 8309

 

Forward looking statements

This document 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 document are made as of the date of this document, 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 931
employees (full‐ time equivalent) as at 30 June 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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