Secure Trust Bank Share Discussion Threads

[p1nkfish] 09/8/2023 07:37

Results much better than valuation would imply. Very pleased.

[cfro] 09/8/2023 07:31

Look absolutely fine to me. Profitability set to increase in the second half too and dividend maintained at 16p which is great (expecting it to be lower).

Some here that are more specialist on the banking sector may care to go through the numbers in greater detail but i am encouraged by arears not increasing.

[riverman77] 09/8/2023 07:21

Priced for catastrophe but results don't look too bad. No doubt market will focus on the negatives (impairment charge, lower NIM, etc) but fairly encouraged overall with decent lending growth.

[1tx] 07/8/2023 11:41

I suppose the main attraction of STB is that you are getting around 100pence of assets for around 30pence with a decent well run business attached in addition that makes good profits & pays a high dividend based on present market price.
On balance I prefer Arbuthnot Latham,its former parent company,and S&U where I have rather higher value shareholding than I have here which are rather more shareholder focused as both of these companies have majority director/family control but STB is very inexpensive.The interim results here should give a good idea how business is progressing.

[deadly] 07/8/2023 10:18

Yes agree, but in this broken market so many shares are buys.

[p1nkfish] 06/8/2023 14:09

Makes no difference unless it encourages buying to swamp selling.
I agree with the article but a hard market environment.

[retsius] 06/8/2023 13:17

JeffH
Brilliant find, just mirrors what we all have been thinking,
Strong buy.

[buffett4] 04/8/2023 18:15

Same here Catebrit- I was technically up to the maximum amount of capital I ever put in to one share but decided to top up with a couple of batches today at £5.58 then £5.59- 18.72 million shares in issue so values the entire business at c£105 million. I can't phathom the pricing at all, unless I'm missing something the business is surely worth considerably more than that. We deal with them on the car finance side, they have just nudged their rates up again actually. Hopefully results next week so lets see.

[catabrit] 04/8/2023 11:57

Added again today. Still a very small position for me but happy to scale up as and when cash comes in from other sales.

[nov31] 03/8/2023 20:30

No. £5 then bet your house on it! 😀

[retsius] 03/8/2023 15:31

is that a spark I see?
R.

[riverman77] 02/8/2023 20:01

Who knows if this is the bottom, but absurdly cheap on any metric and sure will do very well on a 2-3 year view. They have a fairly prudent lending approach so really can't see the catastrophic level of bad debts now being priced in.
On the 13% bond issue, this was a subordinated bond - these are used as a buffer to protect their capital ratio if it falls below a certain level. They always pay a high interest rate as they are high risk - they'd be the first to take losses if their capital position deteriorates. Not too cocnerend about this as it only forms a small part of their overall funding.

[retsius] 02/8/2023 19:38

How low can this go?

Must be near a small investment?

[p1nkfish] 24/7/2023 23:14

Could it be to do with the bond issuance at 13%? Those holders are further up the pecking order and once on board why would they maintain any shareholding exposure and associated risk or take any position?

Lack of buy interest.

[linton5] 24/7/2023 14:39

I honestly don’t understand what’s going on here

[buffett4] 19/7/2023 08:41

I think that is spot on Catabrit, they have a c£3 billion portfolio so even relatively small % changes in their bad debt charge can have a relatively large impact on profitability in the period. I wouldn't be surprised to see an increase in bad debts at some point but the market is pricing in a doomsday scenario- how can a profitable, well run bank with c£300 million shareholders funds making c£40 million profit per annum be worth £100 million. I could be wrong of course but I'd be amazed if STB aren't valued significantly higher in 10 years time. I set a capital limit per company that I invest in and I'm at the limit for STB so trying to stay disciplined and not top up but at these prices it is very tempting to break my own rule!

[catabrit] 18/7/2023 12:34

I think the market is pricing in a significant deterioration in credit quality and thus a wave of defaults as the big squeeze kicks in. I don’t think that’s necessarily wrong but what *is* wrong is not discerning between *who* will suffer and by how much.

A bet here implicitly assumes that STB will fare better than expected or that defaults won’t be as high as feared or that brisk new business with better margins offsets any write downs in the existing book of business.

You never know but STB has a good reputation for being quite prudent so I’m quite happy to bet at this discount to TBV and collect my nice high single digit coupon.

[cfro] 18/7/2023 11:37

You can't quite believe why the shares keep going down. It's getting on for a pe ratio of three. It's like, how cheap do you wanna buy this..

In the last Q1 update they told us that actually business was quite brisk with record new business and lending. Trading was inline with expectations for both the first half year and the full-year. Medium term plans and ambitions were on-track.

So are we missing something here we don't yet know about or are they just so unloved.

I can't see no reason why the dividend won't be around what they paid last year which was 16p (Any raises on this anyone?). Guess we will find out how trading has been early next month.

[linton5] 18/7/2023 10:12

I see arbb had very good results today hopefully secure trust can follow

[catabrit] 17/7/2023 11:35

Just nibbled at this again. It’s quite hard to resist considering the discount. It’s insane how cheap some U.K. stocks are at the minute.

[p1nkfish] 10/7/2023 18:39

Tend not to be too concerned if no volume behind it.
Big holders haven't bailed.
Just keep swimming.

[retsius] 10/7/2023 16:32

Pfish

Look at the chart, enough said.

[riverman77] 10/7/2023 08:53

OSB heavily skewed to mortgage lending , but STB more diversified with more of a skew towards retail finance. So they shouldn't be too exposed to the particular issue facing OSB.