Secure Trust Bank (STB) is a well-established specialist bank addressing niche markets within consumer and business lending.
Management remains confident in achieving a c £4bn in net loan book and delivering a 14-16% return on average equity (RoAE) in the medium term. In FY24, all four of its lending businesses delivered record levels of new business lending while maintaining a stable cost of risk at 1.4% (FY22: 1.4%). STB delivered a total RoAE of 7.3% (FY22: 10.8%). Excluding gains/losses from discontinued operations and exceptional items in 2023, the continuing RoAE was 9.6% (FY22: 9.4%).
Financials |
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Financials |
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Financials |
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Financials |
Flash note
David McCreadie
CEO
Phil Clark
Investor relations
Rachel Lawrence
CFO
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 1.5 | (1.4) | 2.4 |
Relative | 0.6 | (4.4) | 2.8 |
52 week high/low | 740.0p/550.0p |
Secure Trust Bank (STB) posted strong new lending growth of 13.6% in FY24, with the net loan balance reaching £3.3bn. PBT from continuing operations came in 14% lower than our expectations at £36.1m, predominantly from incurring £6.5m in exceptional costs. £4.7m of this was provisions for costs and any required redress relating to the FCA’s industry wide review into Borrowers in Financial Difficulty, while £1.8m was associated with corporate activity. Excluding these costs, PBT from continuing operations was £42.6m, up 9% y-o-y. The bank announced a final dividend of 16.2p/share, bringing the total dividend to 32.3p/share (FY22: 45.1p/share). STB also stated that it will be moving to a progressive dividend policy in FY24 following shareholder feedback. Our forecasts are under review.
Y/E Dec | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2021A | 148.9 | N/A | 55.9 | 239.4 | 2.9 | N/A |
2022A | 169.6 | N/A | 39.0 | 174.7 | 3.9 | N/A |
2023E | 186.5 | N/A | 41.7 | 154.9 | 4.5 | N/A |
2024E | 221.8 | N/A | 55.0 | 211.4 | 3.3 | N/A |