In This Article:
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Net Lending Growth: GBP1.4 billion over the last four years, with an 8.8% increase in 2024 to GBP3.6 billion.
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Operating Income Growth: Increased by 10.4% in 2024.
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Profit Before Tax (Pre-impairments): GBP101 million, an 18% increase from 2023.
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Net Interest Margin: Stable at 5.4% for the full year, with a second-half improvement to 5.5%.
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Cost Income Ratio: Improved by 3.1 percentage points to 50.9%.
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Annualized Cost Savings: GBP5 million achieved from Project Fusion, with a target of GBP8 million by the end of 2025.
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Return on Average Equity: 8%, impacted by elevated cost of risk.
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Adjusted Profit Before Tax: Decreased by 8.2% to GBP39.1 million.
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Impairments: Increased by 44.1% to GBP61.8 million.
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Dividend: Total dividend for the year increased by 5% to 33.8p per share.
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Customer Savings Balances: Grew by 13% to GBP3.2 billion.
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Vehicle Finance Cost of Risk: Increased from 3.4% to 7.6%.
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Retail Finance Net Interest Margin: Improved by 40 basis points to 6.8%.
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Provision for Motor Finance Commission: GBP6.4 million recognized as an exceptional item.
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Capital Ratios: CET1 ratio at 12.3% and TCR at 14.5%.
Release Date: March 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Secure Trust Bank PLC (LSE:STB) delivered strong growth in net lending, increasing by 8.8% to GBP3.6 billion.
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The company achieved significant operational efficiencies, with a 3.1 percentage point reduction in the cost-income ratio to 50.9%.
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Retail finance saw a 40-basis point improvement in net interest margin (NIM) year on year to 6.8%, contributing to overall margin stability.
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The company implemented a new progressive dividend policy, resulting in a total dividend increase of 5% for the year.
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Secure Trust Bank PLC (LSE:STB) has a clear pathway to achieving its GBP4 billion net loan book target, supporting a 14% to 16% return on average equity.
Negative Points
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The vehicle finance division faced significant challenges, with a cost of risk increasing from 3.4% to 7.6% due to regulatory impacts.
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Statutory profit before tax was impacted by exceptional items, including GBP6.9 million for potential redress and costs for motor finance commission.
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The company's adjusted profit before tax decreased by 8.2% year on year to GBP39.1 million.
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Commercial finance contracted by 7.9% due to a subdued market for new business and economic climate attrition.
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There is ongoing legal and regulatory uncertainty regarding historic commissions in the motor finance industry, which could materially impact financial outcomes.