Secure Trust Bank (STB) has been around for 60 years but only demerged from Arbuthnot Banking (that still has a 70.7 per cent stake) and floated on the Alternative Investment Market (Aim) in November 2011. Progress since then has been impressive, with underlying pre-tax profits more than doubling to £16.6m last year, thanks to a 93 per cent jump in the loan book to £297m.
Strong demand for loans on the motor finance side, where STB focuses on the near prime market segment, led to an increase in the book from £63.4m to £89.6m, while personal unsecured lending rose from £43.6m to £68.2m. And while up from £4.6m to £8.9m, impairment losses remain low. The acquisition last June of Everyday Loans, a company STB has been working closely with since 2007, added £73.8m to the loan book and looks timely because although delivering strong growth its ability to expand further was constrained by difficulty in securing additional funding.
STB has no reliance on wholesale funding because the lending side is financed through customer deposits, which last year grew by 47 per cent to £399m. And the group’s core Tier 1 capital ratio grew from an already impressive 21 per cent to 23 per cent.
Analysts at Numis are forecasting 2013 pre-tax profits of £22.8m and EPS of 110.5p, rising to £32.6m and 159p, in 2014.
| SECURE TRUST BANK (STB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,865p | MARKET VALUE: | £291m | |
| TOUCH: | 1,830-1,900p | 12-MONTH HIGH: | 1,920p | LOW: 897p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 358p* | |||
| Year to 31 Dec | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2008 | 5.03 | 28.0 | nil |
| 2009 | 8.10 | 46.4 | nil |
| 2010 | 8.69 | 50.0 | nil |
| 2011 | 7.28 | 39.6 | 4.2 |
| 2012 | 17.17 | 108.9 | 57.0 |
| % change | +136 | +175 | +1,257 |
Ex-div: 10 Apr Payment: 10 May *Includes intangible assets of £5.2m, or 34p a share | |||
