TIDMSTB
RNS Number : 1877N
Secure Trust Bank PLC
19 January 2023
PRESS RELEASE
Secure Trust Bank PLC
LEI: 213800CXIBLC2TMIGI76
19 January 2023
For embargoed release at 07.00 am
SECURE TRUST BANK PLC
Pre Close Trading Update
Strong progress towards strategic goals
Secure Trust Bank PLC ("Secure Trust Bank", "STB" or the
"Group"), a leading specialist lender, is pleased to announce its
pre close trading update for the fourth quarter ended 31 December
2022.
The Group continues to trade in line with management
expectations, with a significant increase in continuing profit
before tax and impairments as the cost income ratio improved
markedly and net interest margin was in line with H1 2022. Net
lending continued to grow in Q4 2022, albeit with management taking
prudent action to manage a lower rate of lending growth,
proactively tightening credit criteria to reflect macroeconomic
uncertainty and manage the overall risk profile of the lending
book. At year-end, arrears in Retail Finance remained below
pre-pandemic levels at historical lows, and arrears in Vehicle
Finance were in line with pre-pandemic levels.
Highlights
Q4 '22 Q4 '21 Change Q3 '22 Change
Net Lending -
Core* GBP2,919.6m GBP2,451.0m 19.1% GBP2,813.4m 3.8%
------------- ------------- ------- ------------ -------
New Business Lending* GBP444.6m GBP470.2m -5.4% GBP502.1m -11.4%
------------- ------------- ------- ------------ -------
Deposits GBP2,514.6m GBP2,103.2m 19.6% GBP2,349.2m 7.0%
------------- ------------- ------- ------------ -------
Net lending - Core*
The Core net loan book grew by 19.1% compared to Q4 2021 and by
3.8% compared to Q3 2022. Year-on-year growth remained particularly
strong in Consumer finance. Business finance growth was more
modest. The Real Estate Finance loan book grew marginally, having
been impacted by the sharp increase in interest rates. Loan to
value is below 60% across the Real Estate Finance loan book.
New Business Lending*
Total new business lending remained healthy year-on-year with
market share gains across our Consumer businesses reflecting a
recovery from COVID and continued investment in our highly rated
customer experience. Given the current macroeconomic environment,
the Group took a proactive approach to tighten credit criteria, as
reflected in the reduction of new business lending by 11.4%
compared to Q3 2022.
Deposits
Customer deposits were 7.0% higher at the end of the quarter
compared to Q3 2022 to support the growth in the loan book. The
Group continues to focus on the management of funding costs in a
rising rate environment and preservation of net interest margin
(NIM). NIM for H2 2022 was in line with the 5.7% for H1 2022.
Tier 2 bond refinancing
The Group has two Tier 2 bonds of GBP25m each, with maturities
of July and October 2028 respectively. Both bonds have call options
after five years, in July and October 2023 respectively. The Group
now has initial regulatory approval to redeem the bonds at its
discretion. Beyond the call date, the bonds automatically roll, the
coupons on the two bonds will reset to margins of 5.7% and 5.6%
over UK 5-year gilts, and the bonds' regulatory capital eligibility
will reduce on a straight-line basis to final maturity.
The Group's annual results announcement for the year ended 31
December 2022 is scheduled for 30 March 2023.
David McCreadie, Chief Executive Officer, said:
"We delivered a strong performance in 2022 including a
significant increase in continuing profit before tax and
impairments. We have benefitted from delivering several cost
initiatives and the actions taken to simplify the Group and saw a
material improvement in our cost income ratio.
We continued to see our loan book grow during the second half of
the year, with Core net lending in Q4 up 19.1% on the prior year,
demonstrating our capability to capture the significant growth
opportunities across our diversified specialist lending
businesses.
I would like to thank all my colleagues for continuing to help
our customers fulfil their ambitions in 2022. We will continue to
manage our risk exposures appropriately during this period of
uncertainty and remain confident in delivering our growth ambitions
and 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' loan portfolio
disposed of in May 2022.
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.
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 833 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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END
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