reports
- Pedro Fonseca
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 Financi...
- MarketLine Department
Mitsubishi HC Capital UK Plc - Strategy, SWOT and Corporate Finance Re...
Summary Mitsubishi HC Capital UK Plc - Strategy, SWOT and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company's structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360˚ view of the company. Key Highlights Mitsubishi HC Capital UK Plc (MHCUK), a subsidiary of Mitsubishi HC Capital Inc provides a range of consumer and commercial financing solutions. It offers financing for retail poi...
- Pedro Fonseca
Secure Trust Bank - V12 Retail Finance to support refreshed targets
In its Q323 trading update, Secure Trust Bank (STB) posted 1.7% q o q growth in net lending alongside 2.6% growth in its deposits. This was despite a 7% fall in new business lending from an elevated Q223 comparable as consumer spending weakened. More importantly, STB also hosted a capital markets day (CMD), where management reiterated the medium-term 14–16% return on average equity (RoAE) target and presented on the V12 Retail Finance business in detail. The RoAE should be supported by an improv...
- Pedro Fonseca
Secure Trust Bank - One-off impairment masks underlying PBT beat
In its H123 results, Secure Trust Bank (STB) delivered an 11% y o y increase in operating income, overcoming margin pressure on rising interest rates. However, PBT was £16.5m, 4% lower than in H122 as the bank incurred a one-off impairment charge of £7.0m stemming from a long-standing debt case in Commercial Finance. Excluding this charge, PBT was £23.5m, which implies a 6% beat on our estimates on an annualised basis. Across the group, underlying impairments are resilient, especially in Vehicle...
Secure Trust Bank: 1 director
A director at Secure Trust Bank bought 11,185 shares at 671p and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly ...
- Pedro Fonseca
Secure Trust Bank - Positioned for strong growth in FY23
Secure Trust Bank (STB) announced a robust trading update with net lending exceeding £3bn, driven by a 17.7% sequential increase in new business lending. Deposits also significantly increased year-on-year by 16.2%. STB has expanded its capital position through the issuance of £90m tier 2 capital bonds, which is now complete. The augmented capital will provide the bank with growth opportunities in its lending activities. Management states that STB is trading in line with expectations and remains ...
- Pedro Fonseca
Secure Trust Bank - Lower-risk growth strategy delivers profit beat
Secure Trust Bank (STB) beat expectations in FY22 as it continued its strategy of growing exposure to prime lending products and utilising its proprietary technology. Driven by prime lending growth, operating income from continuing operations rose 14% to £169.6m which, combined with the ongoing cost efficiency programme, led to 28% pre-impairment PBT growth. PBT from continuing operations fell to £39.0m (£55.9m) as impairments normalised following one-off releases which benefited STB in FY21. ST...
- Pedro Fonseca
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 ...
- Pedro Fonseca
Secure Trust Bank - Revised forecasts reflect macro concerns
We are adjusting our forecasts for Secure Trust Bank (STB) to better reflect the deteriorating economic outlook in the UK. We have raised our FY22 forecast for PBT from continuing operations by 1%, but reduce it by 15% in FY23. Lower loan growth in 2023 is the key driver; we now estimate growth of 13% in FY22 and 7% in FY23. The impairment charge rate for FY23 has been upped from 1.3% to 1.4%. We have also raised our run-off cost estimates in discontinued operations by £2.6m and £2.0m for FY22 a...
- Pedro Fonseca
Secure Trust Bank - Prudence despite resilience
In its Q322 trading update, Secure Trust Bank (STB) said business has been trading in line with management expectations. Loan demand has remained strong in its consumer finance niches. However, the bank says it is slowing growth, tightening lending criteria and increasing its focus on operational efficiency to reflect macroeconomic uncertainty. Total loans in Q322 grew 21.5% y-o-y to £2,813m; we are forecasting 15.8% increase for FY22. Asset quality has remained good while the net interest margi...
- Pedro Fonseca
Secure Trust Bank - Solid interim results
Secure Trust Bank (STB) reported H122 PBT of £24.7m, including an £8.1m gain on the disposal of its Debt Managers Services (DMS) unit. Reported return on equity (ROE) was 12.5%, and the underlying ROE was 8.3%. Pre-provision operating profit was up 22% y o y driven by a 23% increase in core loans. Underlying earnings were down 52% y-o-y as impairments returned to a normal level (annualised 1.4% of loans in H122) after the unusually large COVID-19 related loan reversals in H121. STB’s capital pos...
- Pedro Fonseca
Secure Trust Bank - Strong loan momentum in Q122
Secure Trust Bank disclosed in its Q122 trading update that balance sheet momentum is strong and the business remains on track to deliver on management’s medium-term growth targets. Loan and core loan growth were 4.5% and 4.8%, respectively, in the three months to 31 March. We are forecasting 17% and 18% growth for the full year. Deposit growth was similarly fast paced with a 4.1% increase in the three months and on track for our forecast of 17% for FY21. We note, however, that the economic slow...
- Pedro Fonseca
Secure Trust Bank - Selling debt purchase loan book
Secure Trust Bank (STB) disclosed on 11 March that it is exiting the debt purchase market by agreeing to sell its Debt Managers Service (DMS) portfolio to Intrum UK Finance, a debt purchase specialist. The deal is expected to complete towards the end of Q222. DMS accounts for 4% of STB’s loans balance and STB disclosed that DMS made a small £0.5m loss in 2021. The deal looks to be earnings enhancing. STB estimates that £72m of risk weighted assets will be released (about 50bp of capital), which ...
- Pedro Fonseca
Secure Trust Bank - Pre-close shows loan growth ahead of forecasts
STB disclosed in its pre-close trading update that loan growth is strong and ahead of our forecasts. STB said that it saw a record level of new business lending in Q421 at £471.1m (+52% year-on-year). The core loan balances were up ‘by double digits’ year-on-year versus FY20, compared to our forecasts of 6% (core loans) and 2% (total loans). There were no new statements regarding margins or asset quality, although the news regarding the latter was quite upbeat in the Q3 update. We take note of t...
- Pedro Fonseca
Secure Trust Bank - Pre-close shows loan growth ahead of forecasts
STB disclosed in its pre-close trading update that loan growth is strong and ahead of our forecasts. STB said that it saw a record level of new business lending in Q421 at £471.1m (+52% year-on-year). The core loan balances were up ‘by double digits’ year-on-year versus FY20, compared to our forecasts of 6% (core loans) and 2% (total loans). There were no new statements regarding margins or asset quality, although the news regarding the latter was quite upbeat in the Q3 update. We take note of t...
- 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...
- 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...
- Pedro Fonseca
Secure Trust Bank - Capital markets day optimism
After Secure Trust Bank’s (STB) upbeat trading update in October, we feel there was a bullish tone to its capital markets day presentations on 3 November. This was underlined by the announcement of a new medium-term target for loan book CAGR of 15%+. Areas highlighted for greater focus and opportunity included: 1) growth of digital ‘buy now pay later’ (BNPL) and interest-free products in retail finance, 2) the growing presence of corporate landlords in the UK residential market and 3) new upcomi...
- Pedro Fonseca
Secure Trust Bank - Capital markets day optimism
After Secure Trust Bank’s (STB) upbeat trading update in October, we feel there was a bullish tone to its capital markets day presentations on 3 November. This was underlined by the announcement of a new medium-term target for loan book CAGR of 15%+. Areas highlighted for greater focus and opportunity included: 1) growth of digital ‘buy now pay later’ (BNPL) and interest-free products in retail finance, 2) the growing presence of corporate landlords in the UK residential market and 3) new upcomi...
- Pedro Fonseca
Secure Trust Bank - Momentum building in Q3
In its Q3 trading update, Secure Trust Bank (STB) disclosed that it is experiencing robust loan growth. New business lending is now above pre-pandemic levels. STB’s core lending book in Q321 rose 3.3% quarter-on-quarter and 7% year-on-year. Motor finance new business grew 15% in just three months. New business lending in the quarter was up 20% and 59% on the previous quarter and 12 months ago. Net loan balances were £2,404m in Q321, which is in line with our end-FY21 forecast of £2,400m. We ther...
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