PRESS RELEASE

Secure Trust Bank PLC

LEI: 213800CXIBLC2TMIGI76

27 October 2022

For embargoed release at 07.00 am

SECURE TRUST BANK PLC

Q3 2022 Trading Update

Prudent management of lending growth

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014   as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. 

Secure Trust Bank PLC ("Secure Trust Bank", "STB" or the "Group"), a leading specialist lender, is pleased to announce its trading update for the third quarter ended 30 September 2022.  Positive momentum has continued in Q3 with management taking pre-emptive prudent action to slow lending growth and focus on operational efficiency.  Credit criteria have been proactively tightened further to reflect macroeconomic uncertainty and management of the overall risk profile of the lending book.  The Group continues to trade in line with management's expectations.

Highlights

Net Lending - Core*

The Core net loan book grew by 21.5% compared to Q3 2021 and 2.3% compared to Q2 2022. The Q3 2022 quarter-on-quarter growth was predominately delivered in Consumer businesses of 6.4%, with Business Finance reducing by 1.2%.  Growth slowed in the quarter following actions to tighten credit criteria and reduce new business levels.

Deposits

Customer deposits were 2.5% higher at the end of the quarter compared to Q2 2022 to support the growth in the loan book. The Group continues to focus on the management of funding costs in a steep rising rate environment and preservation of Net Interest Margin which remained flat in Q3 2022 compared with HY22 at 5.7%.

New Business lending*

Total new business lending grew significantly year-on-year with market share gains across our Consumer businesses reflecting a recovery from COVID.  As expected, new business lending decreased in the quarter by 20.8% compared to Q2 2022 reflecting the continued proactive tightening of credit criteria given the current macroeconomic environment.

David McCreadie, Chief Executive Officer:

"We have continued to support our customers and business partners during this period of market uncertainty and are pleased with our operational performance, progress on our strategic targets and further improvements in operational efficiency. Against a backdrop of rising inflation and interest rates we have taken decisions to slow the growth rate of lending.  We will continue to adopt a flexible approach to loan book growth across our diversified portfolio and a prudent approach to risk management. Our track record of navigating economic uncertainties gives us confidence in managing through this challenging period and being well positioned to take advantage of growth opportunities when the economic backdrop improves. Secure Trust Bank remains well positioned to capitalise on its strong foundations in its Core specialist lending markets and to deliver its medium-term targets."

*Following the simplification of our lending activities, 'Core' excludes the Asset Finance and Consumer Mortgages loan books which were disposed of in July 2021 and the Debt Managers (Services) loan portfolio disposed of in May 2022.

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

Stewart Wallace

Tel: 020 7710 7600

Canaccord Genuity Limited (Joint Broker)

Emma Gabriel

Tel: 020 7523 8309

Forward looking statements

This document 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 document are made as of the date of this document, 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 931 employees (full‐ time equivalent) as at 30 June 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.