Secure Trust Bank - FY23 underlying PBT broadly maintained
Secure Trust Bank’s (STB’s) Q423 trading update showcased a robust performance with net loans of £3.3bn, up 13.6% y-o-y. The bank reaffirmed that it is on track to deliver £5m in annualised cost savings in FY24 through its ongoing cost optimisation programme. Despite rising deposit costs, STB’s net interest margin (NIM) remained flat with H123 at 5.4%. STB’s disclosure of modest exposure to discretionary commissions in motor finance lending should be a relief to investors, as the ongoing Financial Conduct Authority (FCA) investigation has been an uncertainty overhanging the sector. Our underlying continuing PBT estimates fell by 2% on marginally lower NIM expectations. Meanwhile, we have reduced our continuing PBT estimate by 7% to £41.7m as we have included a £2.3m exceptional cost related to the FCA’s Borrowers in Financial Difficulty industry-wide review. Our FY24 estimates are unchanged.Secure Trust Bank is involved in banking and financial services. Co.'s segments are: real estate finance, which include residential and commercial investment and development loans; asset finance, which include loans to small and medium sized enterprises; commercial finance, which include invoice discounting and invoice factoring; personal lending, which include unsecured consumer loans; motor finance, which include hire purchase agreements; retail finance, which include point of sale unsecured finance; and residential mortgages, which is for the self-employed, contract workers. As of Dec 31 2017, Co. had total assets of £1.89 billion and total customers deposits of £1.48 billion.
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