REG - Secure Trust BankPLC - Trading Update

Secure Trust BankAnnouncement

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RNS Number : 6414C  Secure Trust Bank PLC  09 October 2025

PRESS RELEASE

Secure Trust Bank PLC

9 October 2025

For immediate release

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

 

SECURE TRUST BANK PLC

 

Trading Update

 

Secure Trust Bank PLC ("STB" or the "Group"), a leading specialist lender,
announces a trading update for the financial year ending 31 December 2025
("FY25") and details for the third quarter ended 30 September 2025 ("Q3'25").

The Group's net lending book declined by 4.1% in the quarter as the run-off of
the Non-Core Vehicle Finance book quickened, combined with a small decrease in
the Core business.  However, year-on-year the Core business net lending
balance grew by 10.3% with all businesses contributing to the strong
performance. Retail Finance grew by 9.1% and Real Estate Finance by 12.6%.
 

On 2 July 2025, the Group announced a pivot in its strategy away from Vehicle
Finance that, over time, is expected to improve its Return on Average Equity
(ROAE).  As a result, in Q3'25 it stopped new lending within its Vehicle
Finance business and put the existing book into run‐off.   As indicated in
the Group's interim results in August 2025, the Vehicle Finance business will
be reported as a Non-Core activity going forward.

In Q3'25 the Vehicle Finance portfolio reduced at a greater rate than
anticipated, reducing expected full year income from that business.   The
Vehicle Finance business also incurred higher than anticipated impairment
charges for the year-to-date with expected improvements in probability of
default rates not yet being fully reflected in the IFRS9 accounting models.
Underlying arrears and default rates in the portfolio remained stable but have
not improved on H1 2025 to the extent anticipated.

Management also expects that the exit from Vehicle Finance may require
additional provisions for onerous supplier contracts associated with new
business originations, which would be treated as exceptional costs.  Further
details will be provided in the 2025 Annual Report and Accounts.

The Core business continues to trade in line with management expectations and
capital ratios remain strong.

Whilst the Board now expects the Group's underlying profit before tax for FY25
to fall below market expectations by up to £9 million, due to the performance
of Vehicle Finance, it remains confident of c. 30% year-on-year growth in
underlying profit before tax.

Q3 Trading Update

 

                         Q3'25    Q2'25    QoQ % Change  Q3'24    YoY % Change

£m

                                  £m                     £m
 Net lending - Core      £3,202   £3,272   -2.2          £2,904   10.3
 Net lending - Non-Core  £469     £557     -15.8         £535     -12.4
 Deposits                £3,449   £3,510   -1.7          £3,141   9.8

 

Net lending

Core balances decreased by 2.2% in the quarter but increased by 10.3%
year-on-year, with Retail Finance at 9.1% growth and Real Estate Finance
performing strongly at 12.6% growth. Core new business in the quarter of £426
million was slightly improved on Q3'24 but at a lower level than Q2'25,
reflecting seasonality in the Retail Finance business and a softer quarter for
new to bank Commercial Finance deals.

 

Following the strategic decision on Vehicle Finance, the Non-Core loan book
decreased by 15.8% in the quarter and 12.4% year-on-year.

 

Deposits

Retail Deposit balances have been managed to a broadly flat position as the
Non-Core business run-off reduces demand for increased funding.

 

Motor Finance Consumer Redress Scheme

The Group notes the FCA's recent consultation paper on an industry-wide
compensation scheme for motor finance customers who were treated unfairly.
Further updates to the market, if necessary, will be provided in due course.

 

 

Enquiries:

Secure Trust Bank PLC

Ian Corfield, Chief Executive Officer

Rachel Lawrence, Chief Financial Officer

Phil Deakin, Strategy and Corporate Development Director

Tel: 0121 693 9100

 

Investec Bank plc (Joint Broker)

Christopher Baird

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

Geoffrey Pelham-Lane, Amrith Uppuluri

securetrustbank@camarco.co.uk (mailto:securetrustbank@camarco.co.uk)

Tel: +44 (0) 7733 124 226, +44 (0) 7763 083 058

 

The person responsible for releasing this statement is Lisa Daniels, Group
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 economic and business conditions, risks from failure of clients,
customers and counterparties, market related risks including interest rate
risk, risks regarding market conditions outside STB's control, expected credit
losses in certain scenarios involving forward looking data, operational risks,
legal, regulatory, or governmental developments, 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 STB

STB is an established, well‐funded and capitalised UK retail bank with a
72-year trading track record. Secure Trust Bank operates principally from its
head office in Solihull, West Midlands.   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 Retail Finance division.

 

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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