Secure Trust Bank Share Discussion Threads

[p1nkfish] 09/4/2024 17:04

End of tax loss selling for 2023 and potential of interest rate cuts unless oil upsets the apple cart?

[mwj1959] 09/4/2024 16:40

Albeit nothing obvious acting as a driver, but positive nonetheless!

[deanowls] 09/4/2024 14:18

Nice to see some positive movements for once.

[p1nkfish] 22/3/2024 12:52

No way to ever know. Look at potential upside in 3 years vs potential downside.
Look at catalysts. What happens if interest rates fall? Bankruptcy rate is not going down anytime soon - is that already in the price? Is all the bad stuff already in the price?

Now - Swiss CB dropped rates this week. Why? One explanation is they see rates coming down over the next 9 - 12 months EVERYWHERE and don't want the Swiss Franc to get out of line by rising so are getting in early. Another reason might be gold backing of their currency - who knows. Nevertheless, they dropped rates.

No one knows or can know. But for 20% downside there might be 100% upside - TBD.

Good luck, dyor, etc.

I expect a period of consolidation, some selling after x-divi date and some selling pressure to abate after end of the tax year. A period that will ring out sellers so upside resistance will reduce. Patience needed.

Wrote some of my own ropey code and it's telling me this, strange but true, hasn't yet broken a potential uptrend to the downside on the weeklies. I am going with that (it has worked elsewhere in the past for decent returns) but may have to wait a fair while to see any price appreciation.

[petersinthemarket] 22/3/2024 12:16

Due to the hefty share price fall in the last few weeks,
I sold half.
Is this the bottom yet.
And should I be buying it back.
Just pondering.
pete

[34adsaddsa] 22/3/2024 10:12

At their capital markets day they said:

"Rachel Lawrence, Chief Financial Officer, will provide an update on the Group's medium term targets and the pathway to achieving a 14%-16% return on average equity. Two refinements are made to the existing medium term targets:-

Loan book growth. Having grown net lending by 45% since the end of 2020 the Group has an ambition to deliver a £4bn loan book. The Group is removing its current target to grow lending at 15%+ CAGR as it considers a £4bn loan book to be a more specific KPI towards achieving the Group's overall medium term targets. The Group had spot lending balances of £3.2bn at the end of Q3 2023.

Cost income ratio. Scaling to £4bn of lending and continued progress on disciplined cost management will allow the Group to deliver a cost income ratio (CIR) of 44-46%. The Group's previous target had been for the CIR to be less than 50%. In addition, Project Fusion, the Group's previously announced cost optimisation programme, is now expected to deliver £5m of annualised savings by the end of 2024."

If they're right about the benefits of getting to a £4 Billion loan book then it makes sense to get there. However, it doesn't make sense to grow lending if you're trading at 0.35x book value.

Once they get to £4 Billion they should start repurchasing lots of shares.

[riverman77] 21/3/2024 15:25

I don't think they can really - their capital position isn't that strong, hence the low dividend payout.

[deanowls] 21/3/2024 14:38

At such a discount to NAV they should be snapping the shares up.

[flyfisher] 21/3/2024 13:53

They have £390m borrowings under the tfsme scheme to repay over the next 18 months

TFSME debt bears an interest rate close to base rate, replacement funds will be at a considerable premium which is likely to dent margins.

No position.

[brucie5] 21/3/2024 13:39

Thanks LG; also in OSB. Looks like this might come down to £6. Despite the 'progressive dividend' approach, which is surely also code for a haircut, this will have lost some of its lustre; and I wonder how it affects Lord Lee's abiding fondness for the shares.

[riverman77] 21/3/2024 13:35

Agree OSB looks better recovery play now, as well as CBG - good results the other day and the fears over the motor finance investigation looks massively overplayed.

[lord gnome] 21/3/2024 13:32

No, Brucie5. Not now. I've been watching and waiting with a view to repurchasing having sold out when it dipped back below 700. Right now I'm more like to add to OSB.

[p1nkfish] 21/3/2024 12:03

At times it may also leave more cash in the business.

[mwj1959] 21/3/2024 12:00

The dividend was always going to be volatile given that it was a function of paying out 25% of earnings. A progressive policy should (but not guarantee) provide greater stability and certainty going forward.

[p1nkfish] 21/3/2024 11:57

To improve predictability.

I am in the buy camp with a 3 year time frame.
CEO has put money where his mouth is and driven to improve.
GLA whatever you do.

[cousinit] 21/3/2024 11:46

It might be partly because this would be from a low base but:

'The Board has decided to move to a progressive dividend policy for the 2024 financial year, reflecting feedback from shareholders.'

So should be more predictable and growing; suggests that this is effectively pressure to increase the payout ratio.

[brucie5] 21/3/2024 11:36

Lord gnome, you still holding?

[lord gnome] 21/3/2024 10:37

The only reason that the dividend yield appeared so high was because the share price has halved in the last two years. Something not quite right here. A huge discount to nav and yet it can't generate a decent return.

[brucie5] 21/3/2024 10:17

Very frustrating, as I had this as one of my better dividend payers. Clearly it was not on a large discount for nothing and this follows hard on the heels of disappointing results from OSB. No wonder so many companies with large nominal dividends are at correspondingly large discounts - the markets simply do not trust the headline figures.
Nevertheless, I haven't yet decided to sell. Traditionally, I believe cuts in dividends may be followed by rerating of the share price as the balance sheet strengthens. Maybe, maybe not.

[riverman77] 21/3/2024 09:56

Very disappointing dividend cut. Cheap no doubt, but just not a very good company and likely to languish at these levels for the foreseeable future.

[p1nkfish] 21/3/2024 09:52

I agree cfro.
Shame the call is at 10 as I will be on another one - have some questions.

[tomps2] 21/3/2024 09:51

Secure Trust Bank (STB) FY23 results highlights - March 2024

David McCreadie, CEO, outlines Secure Trust Bank’s Full Year 2023 highlights for the period ended 31 December 2023.

Watch the video here: hxxps://www.piworld.co.uk/company-videos/secure-trust-bank-stb-fy23-results-highlights-march-2023/

Or listen to the podcast here: hxxps://piworld.podbean.com/e/secure-trust-bank-stb-fy23-results-highlights-march-2023/

[cfro] 21/3/2024 09:40

I'm actually quite happy with these results myself. It is a very conservative bank becoming even more conservative imo..

People seem to forget what a difficult last three or four years we have had what with Covid, Wars, inflation and the cost of living crisis, some of which are still on-going..

They have steered through this difficult period rather well and further provisions have been made in the accounts to cover other future liabilities from Vehicle finance etc. Yes, the dividend has been cut but can we really honestly expect a bank to continue to pay out a 7 or 8% yield consistently? Perhaps not. It still yields a healthy 5% at this price plus they are moving to a progressive dividend policy from now on too.

Importantly the outlook statement is positive also, but the key for me was the 4% increase in tangible book value to £17.80..

[kenmitch] 21/3/2024 09:01

Yes. Disappointing Results and a dividend cut. So sold just now on my “sell on a disappointing update or other bad news” tactic. It’s ruthless but avoids too many losers in the portfolio.

Good luck to those continuing to hold.

[kenmitch] 21/3/2024 09:00

Yes. Disappointing Results and a dividend cut. So sold just now on my “sell on a disappointing update or other bad news” tactic. It’s ruthless but avoids too many losers in the portfolio.

Good luck to those continuing to hold.