03 May 2017
SECURE TRUST BANK PLC
2017 Annual General Meeting Voting Results and Trading Update 2017
At the Annual General Meeting of Secure Trust Bank PLC (the "Bank" or "STB") to be held today at 3.00 p.m. the Chairman, Lord Forsyth, will provide the following update on trading in the first quarter of the year.
"There has been no material change to the underlying performance of the business in the first quarter of 2017 and earnings were in line with management's expectations.
The Bank retains a cautious stance with respect to new lending given the economic environment, the inflation forecasts and what it regards as excessively aggressive competition in some markets. Since the Bank's last disclosures the regulators have announced they are reviewing some of these competitive dynamics. The Bank welcomes this development.
STB has continued to reorient its consumer lending. It no longer originates unsecured personal loans, has ceased originating new subprime motor finance lending and is now concentrating on originating higher volumes of lower risk lower margin motor finance business. The proportion of new lending written in this category during Q1 2017 was over 30% higher than in Q4 2016. This shift is expected to improve the overall motor portfolio quality as it works through to the back book. Our retail finance business, V12, has traded strongly during the first quarter and remains focused on shorter duration prime lending.
The debt collection business, Debt Managers (Services) Ltd ("DMS"), has seen operating profit more than double in the first quarter of this year compared to the same period last year therefore the Bank has decided to bring forward planned investment in people and IT to strengthen its competitive position.
The Bank's SME lending activities have traded well in the period. A number of higher Loan to Gross Development Value (LTGDV) prime Central London residential property development loans have been satisfactorily repaid, in some cases earlier than planned, at the Bank's request. These early redemptions have a short term income impact and remove the Bank's related risk exposure should the Central London prime residential market continue to weaken. They have been replaced with lower margin and modestly leveraged residential investment lending. Overall Real Estate Finance and Invoice Finance lending balances have risen in the period. The Bank retains a cautious stance towards asset finance given the very aggressive competitive forces at play in this market.
The recent improvement in the share price of Non-Standard Finance plc has allowed the Bank to sell, at a profit, all the 23,529,412 NSF shares issued to the Bank in connection with the sale of the Everyday Loans Group.
With very strong capital and funding positions the Board believes that the Bank is well positioned to navigate the current economic environment whilst seeking to take advantage of any attractive opportunities that may arise. The Board continues to see potential to grow the Bank's lending portfolio in line with its ambition and has a clear growth strategy and a pipeline of organic and external new business opportunities."
-ENDS-
Enquiries:
Secure Trust Bank PLC
Paul Lynam, Chief Executive Officer
Neeraj Kapur, Chief Financial Officer
Tel: 0121 693 9100
Stifel Nicolaus Europe Limited, trading as KBW (Joint Broker)
Robin Mann
Gareth Hunt
Stewart Wallace
Tel: 020 7710 7600
Canaccord Genuity Limited (Joint Broker)
Andrew Buchanan
Sunil Duggal
Tel: 020 7523 8000
Bell Pottinger
Dan de Belder
Molly Stewart
Tel: 020 3772 2500
Forward looking statements
This document contains forward looking statements with respect to the business, strategy and plans of Secure Trust Bank PLC ("Secure Trust Bank" or the "Group") and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about Secure Trust Bank 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. Secure Trust Bank'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 Secure Trust Bank's control, 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 hereof, and Secure Trust Bank 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 64 year trading track record. Secure Trust Bank operates principally from its head office in Solihull, West Midlands, and had 735 employees (full-time equivalent) as at 31 December 2016. The Group's diversified lending portfolio currently focuses on three sectors (i) Business Finance through its Asset Finance, Commercial Finance and Real Estate Finance Divisions (ii) Consumer Finance through its Motor Finance and Retail Finance Divisions (iii) Mortgages through its intermediary dedicated Mortgage Division.
As at 31 December 2016 the Group's loans and advances to customers totalled £1,321.0 million, customer deposits totalled £1,151.8 million and the Group's total customer base exceeded 750,000.
