Secure Trust Bank PLC Trading Statement (9751Q)
June 24 2020 - 10:25AM
UK Regulatory
TIDMSTB
RNS Number : 9751Q
Secure Trust Bank PLC
24 June 2020
PRESS RELEASE
Secure Trust Bank PLC
LEI: 213800CXIBLC2TMIGI76
24 June 2020
For immediate release
SECURE TRUST BANK PLC
2020 Annual General Meeting Trading Update
Following the Annual General Meeting of Secure Trust Bank PLC
(the 'Bank' or 'STB' or 'Group') held earlier today, the Board of
STB provides an update on trading in the first five months of the
year, which follows the first quarter update provided with the 2019
Annual Results on 7 May 2020.
Having entered 2020 aspiring to deliver double digit profit
growth for the third successive year, the Group was on track to
deliver this objective until the onset of the COVID-19 outbreak and
UK lockdown in late March.
In response to the outbreak, the Group swiftly implemented
contingency plans focussed on the wellbeing of its workforce,
supporting its customers and business partners, managing risks,
safeguarding capital and maintaining operations. Despite the
significant challenges created by lockdown, the Group has continued
to operate effectively throughout the period. The Board would like
to thank the whole STB team for their resilience and dedication
during this difficult time.
While the Group has continued to trade profitably during the
period, the lockdown has led to significantly reduced new lending
volumes written in April and May, particularly in motor finance,
invoice finance and real estate finance. Noting the majority of our
retail finance business is online the Group is well placed to
continue supporting existing retailer relationships, with volumes
running around 50% of normal levels. Support has also been provided
to SME customers, where appropriate, via government loan schemes.
As a result, and as previously disclosed, the Bank's short duration
balance sheet has been contracting since April and the Group
expects this to continue for the foreseeable future. This
contraction, and the Group's profitable trading during the first
five months of 2020, have resulted in stronger capital and
liquidity ratios relative to the position at the end of 2019.
The recent partial easing of the lockdown has resulted in
increased demand for consumer finance in recent weeks, particularly
in motor finance where used car prices appear to have hardened.
Whether this is due to pent up demand or a more sustained trend
remains to be seen and the volume of motor finance business written
by the Group remains low. Activity levels in retail finance have
risen and will rise due to the relaxation of the social distancing
requirements and the imminent launch of 2020-2021 season ticket
sales by Premier League clubs. Demand for SME lending is subdued,
which may be linked to take up of the government loan schemes.
The Government, Bank of England and financial regulators are
supporting the economy to an unprecedented degree. This is
supporting the credit quality of UK consumers and businesses but it
will take time for the longer term effects of this to emerge,
especially given there are very clear risks of a marked increase in
unemployment and business insolvencies as support schemes close.
These factors will be important considerations influencing the
IFRS9 impairment charge at the half year which will incorporate
more subjectivity than in normal conditions. The Group remains
focused on stringent cost management given reduced levels of
activity in some parts of the business. The heightened levels of
uncertainty are also informing the Group's credit risk appetite,
which is expected to remain cautious for some time.
Despite the prevailing uncertainty, the Group's healthy capital
and liquidity positions, flexible business model and short duration
loan portfolio make it well placed to navigate the current
crisis.
--ENDS-
Enquiries:
Secure Trust Bank PLC
Paul Lynam, Chief Executive Officer
Tel: 0121 693 9100
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 1,017 employees (full-- time
equivalent) as at 31 December 2019. 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 Management and Consumer Mortgages divisions
As at 31 December 2019 the Group's loans and advances to
customers totalled GBP2,450.1 million, customer deposits totalled
GBP2,020.3 million and the Group's total customer base was well
over 1.5 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.
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END
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