Secure Trust Bank Regulatory News (STB)

PRESS RELEASE

Secure Trust Bank PLC

LEI: 213800CXIBLC2TMIGI76

17 October 2018

For immediate release

SECURE TRUST BANK PLC

Q3 2018 Trading Update

Secure Trust Bank and its subsidiaries ("Secure Trust Bank", "STB" or the "Group") provide a trading update in relation to the third quarter ended 30 September 2018.

The business has traded strongly during the third quarter consistent with the trends highlighted by the Group in respect of the first half of 2018. The overall results for the period are in line with management expectations and the Group remains comfortable with its previous guidance in respect of the outlook for the full year.

Given the heightened economic and political uncertainty arising from the ongoing Brexit negotiations the Group continues to be selective in respect of new lending activities. The associated strategic repositioning of the Group towards lower risk lending in attractive market segments continues to drive profit growth, improve the credit quality of new customer loan originations and reduce impairment charges under IFRS9. The investment made in collections during 2017 is being leveraged this year with positive results.

STB continues to diversify and expand its capital base to support its growth, while taking into account increases in regulatory capital buffers and potential headwinds from political and economic uncertainty. As previously disclosed, the Group has in the last three months issued a total of £50,000,000 6.75% Fixed Rate Reset Callable Subordinated Notes due 2028. These qualify as Tier 2 regulatory capital. The Notes will help to reduce the Group's weighted average cost of capital and increase the Group's total regulatory capital ratio to 16.5% on a proforma basis as at 30 June 2018.

The Group has taken a lease on new London premises at 67 Lombard Street in the heart of the City and will be moving out of its current offices in Arbuthnot House on Wilson Street within six months. The Board do not anticipate any material increase in property costs with the larger office space.

On 28th September 2018, the Citizens Advice Bureau issued a "Super Complaint" to the Competition and Markets Authority, arguing that customers across many utility and financial products are being penalised for their loyalty. The Financial Conduct Authority's (FCA) 'Price discrimination in the cash savings market' paper published in July 2018 noted that millions of passive savers are paid very little interest on their legacy deposit accounts. STB has a long standing culture of treating customers fairly, for example paying attractive interest rates to savers and does not expect to face any threat from this super complaint or the FCA's ongoing reviews. The Group is supportive of regulatory changes that serve to create a level competitive playing field which should ultimately result in better outcomes and more choice for consumers and businesses alike.

Enquiries:

Secure Trust Bank PLC

Paul Lynam, Chief Executive Officer

Neeraj Kapur, Chief Financial Officer

Tel: 0121 693 9100

Stifel Nicolaus Europe Limited (Joint Broker)

Robin Mann

Gareth Hunt

Tel: 020 7710 7600

Canaccord Genuity Limited (Joint Broker)

Sunil Duggal

Tel: 020 7523 8000

About the Company:

Secure Trust Bank is an established, well‐funded and capitalised UK retail bank with a 66 year trading track record. Secure Trust Bank operates principally from its head office in Solihull, West Midlands, and had 831 employees as at 30 June 2018. The Group's diversified lending portfolio currently focuses on three sectors:

(i) Business Finance through its Real Estate Finance, Asset Finance and Commercial Finance divisions

(ii) Consumer Finance through its Motor Finance and Retail Finance divisions and

(iii) Consumer Mortgages.

As at 30 June 2018 the Group's loans and advances to customers totalled £1,839.0 million, customer deposits totalled £1,645 million and the Group's total customer base was over 1 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.

www.securetrustbank.com