Secure Trust Bank Regulatory News (STB)

PRESS RELEASE

Secure Trust Bank PLC

LEI: 213800CXIBLC2TMIGI76

For immediate release

SECURE TRUST BANK PLC

Pre-Close Trading Update

Secure Trust Bank PLC ("STB" or the "Group") today issues a pre‐close trading update ahead of its annual results announcement for the year ended 31 December 2018 scheduled for 28 March 2019.

The Group continued to trade strongly in the final period of 2018 and full year results for the year are expected to be in line with management's and the market's expectations.

Customer numbers and the associated Retail Finance, Motor Finance, Mortgages and SME lending balances have continued to grow, in a carefully controlled manner, during the period with customer lending balances exceeding £2 billion for the first time ever. This is an important milestone.

Given the heightened economic and political uncertainty the Group continues to be selective in respect of new lending activities. The strategic repositioning of the Group towards lower risk lending across a focused group of attractive market segments continued to drive profit growth and improve the credit quality of new customer loan originations. The legacy subprime motor portfolio has, as expected, been run-down to immaterial levels and the resulting shift in the portfolio mix has driven the expected significant reduction in impairments. The Group is progressing plans to offer a broader range of motor finance products in the prime end of the market.

The Group's 2018 interim results noted lenders were increasingly competing on price and risk appetite to drive new residential mortgage business volumes and that Secure Trust Bank was tempering the growth of this part of the business. During the second half of 2018 market pressures and competition intensified as evidenced by increasing Loan to Value metrics and lower new net lending margins. Having considered all of these factors, Secure Trust Bank is proposing to cease origination of new residential mortgage business until conditions become more favourable. Any changes in the business that may arise from this proposal, following the conclusion of the consultation period with the staff affected, are not expected to have a material impact on 2018 and 2019 earnings.

The Group's lending portfolio is appropriately positioned for the current conditions and the short duration nature of the asset portfolio means the Group can react quickly to both opportunities and threats.

The Group entered 2019 with positive business momentum, robust capital positions and very strong liquidity and remains well placed to pursue its strategic priorities.

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.