Secure Trust Bank CMD: V12 retail finance9 Nov 2023 14:41
CMD given 8/11/23
https://www.piworld.co.uk/company-videos/secure-trust-bank-stb-capital-markets-day-november-2023/
Medium Term Targets of a £4bn loan book to allow the group to deliver a cost-income ratio of 44-46%, and a future 14-16% return on average equity.
The day focussed on V12 Retail Finance, referred to as ‘An emerging powerhouse’. V12 is delivering significant growth, structural improvement in its cost of risk and significant operational leverage and scalability through digitalisation of customer service.
A low PE of just 3 and a fantastic dividend yield of 8.55%.
There was a helpful chart on risk by sector, (for interest free retail finance) the least risky is Furniture, then Jewellery followed by Leisure (often peddle/electric bikes), highest risk are Electricals although Marks Electrical are one of their retailers. They focus on the less risky sectors with interest free finance, they say the cost of risk has now reduced from 3% of the loan book in 2019 to 1.6% at H123.
Yesterday they also gave a Trading Update showing that Q3 closed with ongoing momentum. Net lending up 14.2%. V12 Retail Finance represents 79% of the growth! Their retail finance market share has also increased to 13.2% from 7.5%. A competitor has disappeared and that has been beneficial to STB. They drive retail finance sales through their relationship with the retailers.