Secure Trust Bank


£258.7m market cap

1400p last close

Secure Trust Bank is a well-established specialist bank, addressing niche markets within consumer and commercial banking. It is launching a non-standard mortgage business.

Investment summary

STB’s May AGM trading update provided further evidence supporting its change in asset mix to focus on segments where the risk-reward pricing is more attractive. The retail and motor finance segments (both with net revenue margins above 10%) are performing well and earnings were slightly ahead of management expectations in the first four months of this year. Our forecasts are unchanged for now, but we may revise them if the interims in July confirm the good news.

Y/E Dec
Revenue (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2017A 129.5 N/A 27.0 116.4 12.0 N/A
2018A 151.6 N/A 36.7 162.0 8.6 N/A
2019E 167.8 N/A 42.0 183.7 7.6 N/A
2020E 185.0 N/A 52.2 225.1 6.2 N/A
Industry outlook

STB is targeting further strong growth in 2019 and is investing in areas such as a new motor finance platform, treasury and risk management to underpin this. The benefits of this are expected to flow through over a number of years. The bank’s proven flexibility should help it adapt to opportunities and challenges that may occur in the macro and political environment. Management remains open to M&A opportunities should they arise. The recent BoE “Dear CEO” letter to challenger banks regarding risk management concerns highlighted the relative strengths of STB’s positioning, governance and longevity (STB was not a recipient).

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (£m) N/A
Forecast gearing ratio (%) N/A
Price performance
Actual (2.8) (7.9) (19.5)
Relative* (4.0) (8.0) (16.9)
52-week high/low 1780.0p/1157.5p
*% relative to local index
Key management
Paul Lynam CEO
Neeraj Kapur FD

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