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Secure Trust Bank

LN: STB

Market Cap£202m

Last Close 1080p

Secure Trust Bank is a well-established specialist bank addressing niche markets within consumer and commercial banking.

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Investment summary

A key attractive feature of Secure Trust Bank (STB) is that it is a niche high-yield lender that is also diversified across the various segments. It has a track record of being nimble in responding to market changes and opportunities, which includes exiting when risk-adjusted returns are not appealing. We are forecasting 15–17% annual loan growth for FY22–23 as management sees good risk-adjusted opportunities despite the inflation uncertainty. This is backed by a strong capital base (CET1 14.5%) and good returns (forecast ROE of 10.2% and 12.3% for FY22e and FY23e respectively). In April we increased our fair value to 2,491p/share (from 2,234p) mainly due to rolling the model forward one year.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 166.1 N/A 19.1 81.0 13.3 N/A
2021A 164.5 N/A 57.4 246.8 4.4 N/A
2022E 186.5 N/A 40.8 167.2 6.5 N/A
2023E 215.2 N/A 56.4 232.0 4.7 N/A
Industry outlook

Government support measures have now largely wound down but some uncertainty remains regarding the shape of the economic rebound and the rising inflation. The base economic scenario is supportive for banks with good economic growth, low unemployment and modest rise in interest rates.

Last updated on 30/06/2022
Content on Secure Trust Bank
Secure Trust Bank – Strong loan momentum in Q122
Financials | research Flash note | 17 May 2022
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Secure Trust Bank – FY21 earnings beat with momentum
Financials | research Outlook | 7 April 2022
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Secure Trust Bank – Selling debt purchase loan book
Financials | research Flash note | 14 March 2022
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Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (0.5) (15.6) 2.1
Relative* 6.1 (10.3) 4
52-week high/low 1390.0p/1025.0p
*% relative to local index
Key management
David McCreadie CEO
Rachel Lawrence CFO