Last close As at 05/08/2026
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Research: Financials
Paul Lynam, Secure Trust Bank’s (STB’s) CEO, is stepping down to become Equiniti Group’s CEO. David McCreadie, who joined STB as a non-exec board member a year ago, will replace him. McCreadie is a banker with 30 years of experience at RBS, Kroger Personal Finance and Tesco Bank. The transition should be seamless, with the growth strategy (organic expansion and M&A opportunities) expected to remain the same. Lynam leaves the bank with a well-capitalised balance sheet (we forecast 13.9% CET1 for FY20), resilient business, a good franchise and well positioned to react when the economy improves. STB will make its pre-close trading update on 21 January, but has reiterated its October 2020 statement that it is trading ahead of consensus FY20 PBT of £7.3m.
Written by
Secure Trust Bank |
CEO change in seamless transition |
New CEO |
Financial services |
6 January 2021 |
Share price performance
Business description
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Analysts
Secure Trust Bank is a research client of Edison Investment Research Limited |
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Paul Lynam, Secure Trust Bank’s (STB’s) CEO, is stepping down to become Equiniti Group’s CEO. David McCreadie, who joined STB as a non-exec board member a year ago, will replace him. McCreadie is a banker with 30 years of experience at RBS, Kroger Personal Finance and Tesco Bank. The transition should be seamless, with the growth strategy (organic expansion and M&A opportunities) expected to remain the same. Lynam leaves the bank with a well-capitalised balance sheet (we forecast 13.9% CET1 for FY20), resilient business, a good franchise and well positioned to react when the economy improves. STB will make its pre-close trading update on 21 January, but has reiterated its October 2020 statement that it is trading ahead of consensus FY20 PBT of £7.3m.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
151.6 |
36.7 |
161.0 |
83.0 |
5.6 |
9.3 |
12/19 |
165.5 |
41.1 |
177.3 |
87.2 |
5.1 |
9.7 |
12/20e |
167.0 |
13.0 |
54.3 |
0.0 |
16.5 |
N/A |
12/21e |
172.9 |
31.6 |
134.7 |
0.0 |
6.7 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Paul Lynam is leaving STB after 10 years to seek a new challenge. The Equiniti Group is an outsourcing company providing technology-led services and is a payments specialist to businesses; it is not a competitor of STB. Although Lynam stepped down on 5 January, he will remain in an executive capacity until 31 March to help with the handover.
Lynam and McCreadie have known each other for years. McCreadie part of the management team that built Tesco Bank and was executive director and managing director from 2015 to 2019. His appointment to STB is subject to regulatory approval by the Financial Conduct Authority and the Prudential Regulation Authority, which have been notified. STB has started to look for a non-executive director to replace McCreadie.
STB issued an upbeat Q3 trading update in October and it is reassuring for this to be confirmed in the latest statement. Although the COVID-19 pandemic and its economic ramifications are still not over, credit book quality has been better than anticipated.
Our fair value for STB is 1,756p per share, implying a FY20e PBV of 1.23x. We assume a sustainable return on equity (ROE) of 13.5%, 10% in cost of equity (COE) and 2% annual growth. Our model assumes no value creation or dividends in 2020 and 2021 (although we believe a dividend is likely to be paid in 2021) and the fair value is the present value of the (ROE-g)/(COE-g) formula at the end of 2022.
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Research: Industrials
A disrupted and volatile trading year – with COVID-19 hitting in Q2 and well above-average growth rates in other months – ended for Epwin with positive year-on-year revenue growth into Q4. Although we have reinstated estimates at lower levels, the company’s business resilience is reflected in good cash flow management and a likely FY20 final dividend payment.