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Secure Trust Bank (STB)

Business description

Secure Trust Bank is a well-established specialist bank, addressing niche markets within consumer and commercial banking. It has launched a non-standard mortgage business.

Stock data

Market cap.£248.5m
Last close1,345.00p
High / Low (52 weeks)2085.0p / 1157.5p
Stock market listingLN
Forecast net debt (m)N/A
Forecast gearing ratio (%)N/A
TeamFinancials
SectorFinancials

Price performance

%1m3m12m
Actual12.1(6.6)(16.9)
Relative *8.4(10.2)(16.1)

* % Relative to local index

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Company news

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 107.0 N/A 27.3 113.0 11.9 N/A
2017A 129.5 N/A 27.0 116.4 11.6 N/A
2018E 152.9 N/A 34.9 154.8 8.7 N/A
2019E 174.0 N/A 44.4 191.7 7.0 N/A

Last updated on 27/01/2019

Investment summary

STB’s FY18 trading update in January was encouraging, indicating that it expects to deliver results in line with management and market expectations. The bank feels vindicated in its earlier decision to reduce risk in the loan book with improved credit quality supporting profits. Reflecting continued competitive margin pressure in residential mortgages management has proposed a stop on new business until conditions improve, potentially when the regulatory playing field becomes more level from 2020. This decision is not expected to impact 2018/19 earnings materially. Otherwise STB’s loan momentum remains strong: loans exceeded £2bn at end FY18 (vs £1.6bn 2017), similar to our forecast. The growth is being driven by retail finance, motor finance (where they have migrated from sub-prime to near-prime, a larger target market) and SME lending (mostly invoice financing).

Last updated on 01/02/2019

Industry outlook

The bank sees itself entering 2019 with positive business momentum, robust capital and well placed to continue its growth strategy despite the current political uncertainty (albeit subject to any significant GDP setback). Management will look at M&A opportunities should they arise.

Last updated on 01/02/2019

Key management

Paul Lynam, CEO
Neeraj Kapur, FD

Company address

One Arleston Way
Shirley
Solihull, West Midlands
B90 4LH
United Kingdom
0121 693 9100
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