Secure Trust Bank - In line, with good momentum
In its FY22 post-close trading update, Secure Trust Bank (STB) announced that business has been trading in line with management expectations and with good momentum. Continuing profit before taxes and impairments was ‘significantly’ up, while its cost to income ratio ‘improved markedly’. Core loans rose by 19.1% y-o-y (we forecast 13%), with strongest growth in consumer finance as expected. New business lending did drop 11% y-o-y for Q422 as the bank tightened its lending criteria (as previously flagged by management) due to macroeconomic concerns. Loan arrears are back to pre-pandemic levels in vehicle finance and at record low levels in retail finance. This reflects STB’s repositioning to more prime segments and the de-risking of its loan book over the last few years. STB stated that its FY22 net interest margin percentage remained stable versus H122 despite rising funding costs (this matches our expectation).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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