With the benefit of hindsight, Secure Trust Bank’s (STB) transition to lower-risk areas of lending was well timed. The alternative lender entered the crisis in a robust position, posting loan book growth of more than a fifth last year and a reduction in the cost of risk to just 1.4 per cent as impairment levels were held flat. Yet the lender is braced for inevitable disruption ahead.
Since mid-March there has been a reduction in demand for consumer finance products, with no new motor finance loans being written, and retail finance running at around half normal levels, supported by demand for sports equipment and consumer electronics. That will weigh on loan book growth for the full year, while a looming rise in unemployment levels means impairments are expected to rise. Management is understandably withholding financial guidance at present.
Analysts at Peel Hunt placed forecasts under review, but prior to the release of full-year results forecast adjusted net assets of 1,464p a share at the December 2020 financial year-end.
| SECURE TRUST BANK (STB) | ||||
| ORD PRICE: | 830p | MARKET VALUE: | £ 155m | |
| TOUCH: | 810-830p | 12-MONTH HIGH: | 1,730p | LOW: 680p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 1,285p | LEVERAGE: | 10.9 | |
| Year to 31 Dec | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 92 | 24.8 | 106 | 72 |
| 2016 | 107 | 19.4 | 78 | 75* |
| 2017 | 130 | 25.0 | 108 | 79 |
| 2018 | 152 | 34.7 | 153 | 83 |
| 2019 | 166 | 38.7 | 168 | 20 |
| % change | +9 | +12 | +10 | -76 |
| Ex-div: | na | |||
| Payment: | na | |||
| *Excludes special dividend of 165p a share, following the sale of ELG | ||||
