Secure Trust Bank (LSE: STB)

Last close As at 18/03/2024

GBP6.80

−12.00 (−1.73%)

Market capitalisation

GBP132m

Secure Trust Bank (STB) is a well-established specialist bank addressing niche markets within consumer and business lending.

The bank announced that in H223 it had entered a formal process with the FCA relating to the bank’s collections processes in Vehicle Finance, following an industry-wide review. In response, we have included an exceptional cost of £2.3m in FY23 to cover the expenses associated with the review process. The review is expected to close in H124. Additionally, the bank announced its NIM was in line with H123, so we have marginally lowered our NIM to 5.4% for FY23. Thus, continuing and underlying continuing PBT is £41.7m and £44.0m, 7% and 2% lower than previous expectations, respectively. FY24 estimates are unchanged.

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Sector

Financials

Equity Analyst

Rob Murphy

Managing Director, Financials and Investment Trusts

Analyst avatar placeholder

Armando Hoxha

Associate Analyst, Financials

Key Management

  • David McCreadie

    CEO

  • Phil Clark

    Investor relations

  • Rachel Lawrence

    CFO

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (5.7) 3.9 (7.0)
Relative (8.8) 0.7 (9.8)
52 week high/low 756.0p/550.0p

Financials

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.

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2021A 148.9 N/A 55.9 239.4 2.9 N/A
2022A 169.6 N/A 39.0 174.7 4.0 N/A
2023E 186.5 N/A 41.7 154.9 4.5 N/A
2024E 221.8 N/A 55.0 211.4 3.3 N/A

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