Secure Trust Bank Regulatory News (STB)

16 May 2018

SECURE TRUST BANK PLC

2018 Annual General Meeting Trading Update

At the Annual General Meeting of Secure Trust Bank PLC (the 'Bank' or 'STB') to be held at 3.00 pm today the Chairman, Lord Forsyth, will provide the following update on trading in the first four months of the year:

"There has been no material change to the underlying performance of the business in the first four months of 2018 and earnings were in line with management's expectations.

Excellent progress has been made in the first four months in converting the new business pipeline into deals written. As a result total new lending across the SME and Consumer Finance portfolios has been strong with margins meeting management's expectations. We have prioritised growth in the Real Estate Finance, Invoice Finance, Retail Finance and Motor Finance businesses. Growth in Consumer Mortgages has continued to be controlled whilst we wait to see how the closure of the Term Funding Scheme (TFS) impacts on the pricing of new mortgage lending and competitive dynamics in this part of the market.

Credit quality has been in line with management's expectations with the benefits of the strategic repositioning of the balance sheet emerging as anticipated.

Demand for savings products has remained strong with no material change in market pricing noted. The operational benefits of the new savings platform installed in 2017 are beginning to be realised as the Bank's overall deposit customer base grows. This new platform will enable the Bank to launch additional savings products during 2018. The Bank is conscious of the potential consequences of the closure of the Term Funding Scheme (TFS), with many banks needing to refinance significant TFS drawings over the next four years. STB's usage of TFS remains modest and in order to continue to minimise maturity transformation risks STB has been active in the fixed term fixed rate deposit market in the first four months of 2018 and will remain active in this market going forward.

The debt collection business, Debt Managers (Services) Ltd ("DMS"), has continued to grow its profits during the period.

As noted in the 2017 annual results, given the significant balance sheet growth which is targeted coupled with the ongoing build-up of the required Capital Conservation and Counter Cyclical Buffers, the Bank is exploring ways to optimise the capital base and weighted cost of capital. This could include raising Additional Tier 1 and/or Tier 2 capital, subject to market conditions and the Board determining that it is in the interest of the Bank to do so. 

The current economic outlook remains uncertain. Therefore the Bank will continue to adopt a cautious stance in respect of its credit risk appetite. The Board continues to see potential to grow the Bank's lending portfolio in line with its ambition and has a clear growth strategy and a pipeline of organic and external new business opportunities."

-ENDS-

Enquiries:

Secure Trust Bank PLC

Paul Lynam, Chief Executive Officer

Neeraj Kapur, Chief Financial Officer

Tel: 0121 693 9100

Stifel Nicolaus Europe Limited, trading as KBW (Joint Broker)

Robin Mann

Gareth Hunt

Stewart Wallace

Tel: 020 7710 7600

Canaccord Genuity Limited (Joint Broker)

Andrew Buchanan

Sunil Duggal

Tel: 020 7523 8000

Tulchan Communications

Tom Murray

Tel: 020 7353 4200

Forward looking statements

This document contains forward looking statements with respect to the business, strategy and plans of Secure Trust Bank PLC ("Secure Trust Bank" or the "Group") and its current goals and expectations relating to its future financial condition and performance. Statements that are not historical facts, including statements about Secure Trust Bank or management's beliefs and expectations, are forward looking statements. By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Secure Trust Bank's actual future results may differ materially from the results expressed or implied in these forward looking statements as a result of a variety of factors. These include UK domestic and global economic and business conditions, risks concerning borrower credit quality, market related risks including interest rate risk, inherent risks regarding market conditions and similar contingencies outside Secure Trust Bank's control, any adverse experience in inherent operational risks, any unexpected developments in regulation or regulatory and other factors. The forward looking statements contained in this document are made as of the date hereof, and Secure Trust Bank undertakes no obligation to update any of its forward looking statements.

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 767 employees (full-time equivalent) as at 31 December 2017. 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 31 December 2017 the Group's loans and advances to customers totalled £1,321.0 million, customer deposits totalled £1,599.0 million and the Group's total customer base was approaching one million.