Q1 2023 Trading Update
PRESS RELEASE
Secure Trust Bank PLC
LEI: 213800CXIBLC2TMIGI76
18 May 2023
For immediate release
SECURE TRUST BANK PLC
Q1 2023 Trading Update
Net Lending exceeds £3bn, well-placed for further growth
Secure Trust Bank PLC ("Secure Trust Bank", "STB" or the "Group"), a leading specialist lender, is pleased to announce its trading update for the first quarter ended 31 March 2023. Loan book growth momentum has continued, net lending exceeded £3bn and our cost optimisation programme remains on track to deliver £4m annualised savings by end of 2023. Arrears across Consumer Finance have remained stable at low levels.
Highlights
|
|
Q1'23 |
Q4'22 |
Change |
Q1'22 |
Change |
|
New business lending1 |
£523.5m |
£444.6m |
17.7% |
£488.2m |
7.2% |
|
Net lending1 |
£3,013.3m |
£2,919.5m |
3.2% |
£2,569.3m |
17.3% |
|
Deposits |
£2,544.6m |
£2,514.6m |
1.2% |
£2,190.1m |
16.2% |
1 Performance metrics relate to continuing operations as described on pages 2 and 130 of the 2022 Annual Report and Accounts
New business
Total new business lending increased by 17.7% in the quarter and 7.2% compared to Q1'22 demonstrating sustained growth momentum, despite tightened lending criteria. Business Finance delivered its strongest quarterly lending result since Q2'22 and Consumer Finance maintained a strong lending performance for the fourth successive quarter. Further market share gains were achieved in Retail Finance, rising to 11.9% from 11.4% as at December 2022 and Vehicle Finance remained stable at 1.1%.
Net lending
£3bn of net lending was achieved in the quarter, a significant milestone for the Group. The customer loan book grew by 3.2% in the quarter and 17.3% compared to Q1'22. Lending in Real Estate Finance grew by 4.3% as the pipeline from Q4'22 converted to new business. Commercial Finance balances marginally declined in the period. Vehicle Finance lending grew by 7.3% and Retail Finance by 3.5% in the quarter reflecting strong new business levels.
Deposits
We attracted £343m of customer deposits in the quarter. Deposit balances were 1.2% higher at the end of the quarter, and 16.2% higher than Q1'22.
Capital
On 28 February 2023, the Group issued £90 million 13.0% Fixed Rate Callable Subordinated Notes due 2033 which qualify as Tier 2 regulatory capital, and at the same time £25 million of Fixed Rate Callable Subordinated Notes due 2028 were repurchased and cancelled. On 20 March 2023, the Group repurchased and cancelled the remaining £25 million of Fixed Rate Callable Subordinated Notes due 2028. This enlarged capital position provides significant opportunity for the Group to deliver further high-quality loan book growth.
David McCreadie, Chief Executive Officer, said:
"The Group has made a strong start to the year and is trading in line with management expectations. I am delighted that we completed the issuance of £90m of new Tier 2 capital and subsequent buy-back of our existing £50m Tier 2 capital due 2028. We see significant opportunity for sustainable growth in our focused market segments and are well positioned to help consumers and businesses fulfil their ambitions and to continue to grow our net lending and scale our business as we strengthen our distribution networks and relationships. I am pleased to confirm that we launched our AppToPay pilot at the end of April.
We continued to focus on delivering cost initiatives to help mitigate the impacts of inflation and expect to deliver a further improvement in the cost income ratio in 2023.
Although the economic environment remains uncertain, we have started the year positively and are confident in delivering on our plans for the full year and our medium term targets.
Enquiries:
Secure Trust Bank PLC
David McCreadie, Chief Executive Officer
Rachel Lawrence, Chief Financial Officer
Phil Clark, Investor Relations
Tel: 0121 693 9100
Stifel Nicolaus Europe Limited (Joint Broker)
Robin Mann
Akshman Ori
Tom Marsh
Nicholas Harland
Tel: 020 7710 7600
Canaccord Genuity Limited (Joint Broker)
Emma Gabriel
Harry Rees
Tel: 020 7523 8309
The person responsible for the release of this announcement on behalf of STB is Mark Stevens, Company Secretary.
Forward looking statements
This announcement contains forward looking statements about the business, strategy and plans of STB and its current objectives, targets and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about STB's or management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. STB's actual future results may differ materially from the results expressed or implied in these forward looking statements as a result of a variety of factors. These include UK domestic and global economic and business conditions, risks concerning borrower credit quality, market related risks including interest rate risk, inherent risks regarding market conditions and similar contingencies outside STB's control, the COVID-19 pandemic, expected credit losses in certain scenarios involving forward looking data, any adverse experience in inherent operational risks, any unexpected developments in regulation or regulatory, and other factors. The forward looking statements contained in this announcement are made as of the date of this announcement, and (except as required by law or regulation) STB undertakes no obligation to update any of its forward looking statements.
About the Company
Secure Trust Bank is an established, well‐funded and capitalised UK retail bank with a 70 year trading track record. Secure Trust Bank operates principally from its head office in Solihull, West Midlands, and had 855 employees (full‐ time equivalent) as at 31 December 2022. The Group's diversified lending portfolio currently focuses on two sectors:
(i) Business Finance through its Real Estate Finance and Commercial Finance divisions, and
(ii) Consumer Finance through its Vehicle Finance and Retail Finance divisions.
Secure Trust Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Secure Trust Bank PLC, One Arleston Way, Solihull, B90 4LH.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
Latest directors dealings
- 1 hour ago Johnson Matthey
- 3 hours ago Galliford Try
- 3 hours ago Galliford Try
- 3 hours ago Centrica
- 3 hours ago Smith & Nephew