Secure Trust Bank


£239.3m market cap

1295p last close

Secure Trust Bank is a well-established specialist bank, addressing niche markets within consumer and commercial banking. It has launched a non-standard mortgage business.

Investment summary

STB’s FY18 trading update in January was encouraging, indicating that it expects to deliver results in line with management and market expectations. The bank feels vindicated in its earlier decision to reduce risk in the loan book with improved credit quality supporting profits. Reflecting continued competitive margin pressure in residential mortgages management has proposed a stop on new business until conditions improve, potentially when the regulatory playing field becomes more level from 2020. This decision is not expected to impact 2018/19 earnings materially. Otherwise STB’s loan momentum remains strong: loans exceeded £2bn at end FY18 (vs £1.6bn 2017), similar to our forecast. The growth is being driven by retail finance, motor finance (where they have migrated from sub-prime to near-prime, a larger target market) and SME lending (mostly invoice financing).

Y/E Dec
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 107.0 N/A 27.3 113.0 11.5 N/A
2017A 129.5 N/A 27.0 116.4 11.1 N/A
2018E 152.9 N/A 34.9 154.8 8.4 N/A
2019E 174.0 N/A 44.4 191.7 6.8 N/A
Last updated on 21/03/2019
Industry outlook

The bank sees itself entering 2019 with positive business momentum, robust capital and well placed to continue its growth strategy despite the current political uncertainty (albeit subject to any significant GDP setback). Management will look at M&A opportunities should they arise.

Last updated on 21/03/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
Actual (3.5) 7.0 (21.9)
Relative* (5.7) (2.3) (24.3)
52-week high/low 2085.0p/1157.5p
*% relative to local index
Key management
Paul Lynam CEO
Neeraj Kapur FD

Content on Secure Trust Bank