Edison Investment Research - SECURE TRUST BANK PLC (STB) Secure Trust Bank - New tech and lower impairments

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Edison Investment Research

Pedro Fonseca

Secure Trust Bank - New tech and lower impairments

Secure Trust Bank (STB) announced that it has acquired AppToPay for an undisclosed ‘small amount’ and plans to use AppToPay’s proprietary technology platform to develop and grow its digital Buy Now Pay Later (BNPL) business. STB has also disclosed that its FY21 loan impairments will be ‘materially below’ analyst consensus of £12.9m (Edison: £12.7m). This is welcome news, although most investor attention regarding impairments has moved to focus on FY22. We are adjusting our FY21e EPS by 7% to 226.5p due to our now reduced £7.9m impairment estimate. All our other assumptions are unchanged, as detailed in our August 2021 update note, Good news as flagged. Our fair value remains 2,234p.

30/11/2021 1 EN

Underlying

SECURE TRUST BANK PLC

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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GB00B6TKHP66 London Stock Exchange United Kingdom

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Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Pedro Fonseca

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Secure Trust Bank - New tech and lower impairments

Secure Trust Bank - FY23 underlying PBT broadly maintained

Mitsubishi HC Capital UK Plc - Strategy, SWOT and Corporate Finance Report

Secure Trust Bank - V12 Retail Finance to support refreshed targets

Triple Point Social Housing REIT - Strong rent growth and improving rent collection

ProCredit Holding - A solid start to 2024

Britvic - Buoyant volumes in H124

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