Secure Trust Bank Pre-Close Trading Update

PRESS RELEASE

Secure Trust Bank PLC

LEI: 213800CXIBLC2TMIGI76

21 January 2021

07.00am Embargo

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (MAR)

SECURE TRUST BANK PLC

Pre Close Trading Update

Secure Trust Bank PLC and its subsidiaries ("Secure Trust Bank", "STB" or the "Group") today issues a pre close trading update ahead of its annual results announcement for year ended 31 December 2020 scheduled for 25 March 2021.

The strong rebound in demand for the Group's lending products since the easing of initial lockdown restrictions continued during the fourth quarter.  The introduction of new restrictions during the end of December 2020 and into 2021 have impacted the demand in the consumer businesses.

As at 11 January 2021, the Group's compiled Full Year 2020 consensus was £7.6m Statutory PBT, ranging from £5.6m to £9.7m. As the Group has made further positive progress since the Q3 trading update in October, the Group expects that the full financial year 2020 results will be materially ahead of the upper end of consensus profit before tax.

As has been the case since the start of the crisis, colleagues across the Group continued to support their customers, business partners and each other during the most trying of circumstances. This remains our priority.

Highlights

The Group delivered a strong financial and operating performance in the fourth quarter.

·    The loan book has remained resilient, increasing slightly on the previous quarter whilst maintaining pricing and underwriting discipline. Overall, the Group's loan book is performing in line with management's expectations.

·    New business volumes continued to increase during the quarter, driven by Real Estate Finance and Commercial Finance as we continued to support our existing SME customers. Retail Finance experienced strong demand pre-Christmas, however early 2021 demand has been muted by the new restrictions. As expected, Motor Finance volumes were and continue to be impacted by the new lockdown restrictions, although we continue to see an attractive long-term opportunity in this market.

·    Repayment holidays in Motor Finance peaked mid‐summer at 19.3% of the customer base. As at 31 December, only 1.2% of Motor Finance customers had an active repayment holiday. Repayment holidays in Retail Finance peaked at 2.6% of the customer base. As at 31 December, only 0.3% of Retail Finance customers had an active repayment holiday.

·    Capital and Liquidity positions remain strong with profitable trading and the continuation of the strategy of replacing maturing higher priced term deposits with materially lower cost deposits.

Outlook

While the Board continues to be encouraged by current trading, it recognises that the impact of Covid-19 on the UK economy generates potential uncertainty in the near term. The Group will be better placed to comment on financial year 2021 outlook when it publishes its financial year 2020 results.

David McCreadie, Chief Executive Officer:

"The Group has continued to perform well in a challenging and uncertain environment. This has been made possible by the hard work and commitment of our colleagues and I would like to thank every one of them for that.

As we manage the ongoing impacts of the crisis, including the introduction of tougher restrictions on all of us, I am confident in our ability to provide continued support to our customers.

Our business diversification has proven to be a strength throughout 2020. While the environment remains uncertain, we continue to believe that the changing competitive landscape and lower funding costs will present opportunities for STB to grow and flourish in attractive niches over the long-term. I look forward to updating our shareholders on our future strategic priorities at our full-year results in March."

Enquiries:

Secure Trust Bank PLC

David McCreadie, Chief Executive Officer

Rachel Lawrence, Chief Financial Officer

Tel: 0121 693 9100

Stifel Nicolaus Europe Limited (Joint Broker)

Robin Mann

Gareth Hunt

Stewart Wallace

Tel: 020 7710 7600

Canaccord Genuity Limited (Joint Broker)

Emma Gabriel

Tel: 020 7523 8000

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", "STB" 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 68 year trading track record. Secure Trust Bank operates principally from its head office in Solihull, West Midlands, and had 972 employees (full‐ time equivalent) as at 30 June 2020. The Group's diversified lending portfolio currently focuses on two sectors:

(i)            Business Finance through its Real Estate Finance, Asset Finance and Commercial Finance divisions,

(ii)           Consumer Finance through its Motor Finance, Retail Finance, Debt Collection and Consumer Mortgages divisions

As at 30 June 2020 the Group's loans and advances to customers totalled £2,377.5 million, customer deposits totalled £1,999.2 million and the Group's total customer base was well over 1.6 million.

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.