Secure Trust Bank Regulatory News (STB)

PRESS RELEASE

For Immediate Release

15 October 2015

SECURE TRUST BANK PLC

2015 Third Quarter Trading Update

The Secure Trust Bank PLC group ("STB" or "Secure Trust Bank" or "the Group") traded strongly during the quarter ended 30 September 2015. Total customer lending balances across the Group now exceed £900 million for the first time.

The Bank continues to enjoy the favourable conditions in the retail deposits market. It has raised additional two, three, four, five and seven year fixed rate deposits which enable it to match broadly the new lending activities and to mitigate interest rate basis risks.

STB has maintained its policy of investing in its system and people capabilities. A new deposit platform capable of offering Cash ISA products is being developed for launch in H2 2016. STB continues to add to its senior and executive team as it seeks to ensure that its ongoing growth is well controlled and sustainable. During Q3 the Bank was pleased to announce the appointment of Ian Henderson into a new role responsible for strategy, personal lending and mortgages. Ian was the CEO of Kensington Mortgages and prior to that the CEO of Shawbrook Bank.

Demand for consumer lending, especially in Retail and Motor Finance, remained healthy and overall new lending business volumes are materially higher than for the same period in 2014. STB does not take residual value risks via operating lease products and does not anticipate being negatively impacted by the emerging emissions scandal impacting Volkswagen. The Bank is monitoring developments closely as it is possible that some manufacturers will find their cost of finance increasing which could dampen their appetite for providing vehicle finance which could present opportunities for the Group.

Secure Trust Bank SME lending activities continue to make positive progress with good levels of new business in Asset Finance, Invoice Finance and Real Estate Finance being written. There has been a notable increase in demand since the General Election and over the summer period. The Group notes HM Government recently committed to build one million new homes during the life of this parliament and feels it is well positioned to help fund proven housebuilders in support of this public policy.

The Group's total new lending volumes written for the first nine months of 2015 are over 93% higher than in the same period last year. The loan book continues to perform well and impairment levels remain below the level expected when the loans were originated.

Secure Trust Bank continues to work on a range of organic and external business opportunities.

As a result of the growth in lending balances coupled with continuing lower levels of impairments STB anticipates the 2015 full year results will be in line with market expectations. With the UK economy continuing to expand, inflation remaining subdued, real wages growing, employment levels rising and consumers and businesses feeling more confident Secure Trust Bank believes it is well positioned to sustain its positive progress over the coming period.

-ENDS-

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