Secure Trust Bank Share Discussion Threads

[p1nkfish] 25/1/2024 07:27

Mid single digit, say < 7% max, over a 4 year period (probably less than 48 months) and stopped about 7 years ago.

Sounds like noise.

Overall very positive update.

[johnhemming] 25/1/2024 07:15

"Regulatory initiatives - Vehicle Finance

We note the FCA's recent announcement about discretionary motor finance commissions. We operated some discretionary commission arrangements until 2017. From 2014 to 2017, a mid-single digit proportion of our new vehicle finance loans included such arrangements. The FCA plans to set out its next steps in Q3 2024, when the implications for the industry should become clearer. We will provide further information to the market on these developments as appropriate."

[buffett4] 24/1/2024 09:34

One more sleep to go.....

[red ninja] 20/1/2024 13:10

pf,

Agree there is nothing which states that V12/STB has anything to do with this.

The Shares Magazine article on Motor finance mentions :-

"Firms which generate revenue from providing motor finance include Close Brothers (CBG), Inchcape (INCH), S&U (SUS) and Secure Trust Bank (STB)."

I was wondering why they mention those firms particularly and I think it is probably just because Shares Magazine has covered those companies in preceding weeks/months rather than for any untoward reason.

[p1nkfish] 20/1/2024 10:21

I don't see any reference to V12/STB being tainted. Have been searching. Clarity from STB would help.


"Whilst other lenders had to change their pricing approaches on discretionary commission structures, we were already running on a fully compliant model."

See Pricing Approach.

2020 Final Results - "It is not anticipated that the FCA's ban on discretionary commission models will require actions by the Group, however, the additional disclosure requirements are being worked through with Retail Finance and Motor Finance."

[red ninja] 20/1/2024 10:05

Thanks B4

It's good to have an opinion from someone in the industry.

[buffett4] 20/1/2024 09:48

I work in motor finance and unless I am missing something I do not believe that STB have any involvement in the historical commission arrangements that the FCA are potentially classing as unfair. It is my understanding that they relate to a 'difference in charges' (DIC) commission structure where by the broker/dealer historically received a higher commission from the lender for selling a higher rate to the customer. This was common place in the market from 'prime' motor finance up to three or four year ago. However, I believe that since the prime motor finance business at STB namely V12 was only introduced a few years ago , I dont think they ever offered 'DIC' commission arrangements. The new arrangements are typically a fixed % commission based on a fixed rate. Moneyway are a non-prime lender, we have dealt with them for over a decade. In the non-prime market DIC arrangements were not common place, and typically the lender pays a set fee dependent upon various factors such as the tier of lender (dependent upon the customers credit score) etc. I do not recall Moneyway ever offering a DIC commission arrangement. So please DYOR but it is my opinion from what I can gather at this stage that STB are in the clear in relation to potentially unfair historical commission arrangements. Hope that is helpful.

[red ninja] 20/1/2024 09:06

It appears at this stage that the companies in the frame for motor finance allegations are mostly the big ones :-

Barclays
Lloyds
Santander
Motonovo

However, the market is obviously worried about contagion.

[red ninja] 19/1/2024 16:14

It would be nice if the FCA could give more timely direction to the finance industry rather than after a decade or two.

[deanowls] 19/1/2024 16:07

Then the government call in banks and ask why they are not lending!

Madness.

[flying pig] 19/1/2024 15:09

P fish I entirely agree. Equally if they were to be threatened, it would make sense to have an RMS quantifying the problem and potential exposure.

On balance I think it is probable that they are relatively innocent.

[p1nkfish] 14/1/2024 15:13

If they do RNS a statement making it clear they are not impacted/involved it could be a good piece of PR.

Offering untainted Motor Finance Products.

[p1nkfish] 13/1/2024 23:11

Would be a good idea if STB gave an RNS statement but I think V12 are clean in this regard - but DYOR just in case I'm off mark.

"Whilst other lenders had to change their pricing approaches on discretionary commission structures, we were already running on a fully compliant model."

See Pricing Approach.

2020 Final Results - "It is not anticipated that the FCA's ban on discretionary commission models will require actions by the Group, however, the additional disclosure requirements are being worked through with Retail Finance and Motor Finance."

[popit] 13/1/2024 21:56

Anyone know if STB will be affected by the FCA investigation of motor finance?

How bad will it be for them?

They are saying that the liabilities will be many billions of pounds

[apple53] 11/1/2024 18:13

Some intriguing trading again today. It seemed to be 705 bid and 714-16 offered around lunch before 2 trades at 732 (summing to £9k) followed shortly after by £1k at 692p! The small auction was at 708 but otherwise the final trading seemed to be 715-20, so definitely a new (recent) high.

[jeff h] 11/1/2024 15:07

Marks Electrical another listed STB customer.

Retail not doing well but then many do not look in danger of going bust either, besides if they were doing really well they may not need loans from STB!

[jeff h] 07/1/2024 18:33

STB making loans to some well known names:-



Ted Baker, and the listed Anexo other clients.

If they can avoid defaults the full year trading update on the 25th should read well.

[flyfisher] 04/1/2024 14:27

It has about £400m debt under the government TFSME scheme.

Tfsme is repayable from 2024, so they will have to sort out an alternative source of funding or shrink the loan book. Have they covered this in a presentation?

No position.

[brucie5] 04/1/2024 14:07

Probably not.
;)

[xamf] 04/1/2024 13:48

I've traded shares for many years (perhaps too many) and it still amazes me why someone would sell a stock like STB at this point when the fundamentals are so strong.

In November they said : 'trading in third quarter of 2023 was in line with expectations, and the net loan book "continued to grow". Net lending increased 14% to GBP3.21 billion from GBP2.81 billion for the same quarter in 2022. New business lending is up 15% year-on-year to GBP578.7 million from GBP502.1 million, but down 7.3% from the second quarter of 2023 from GBP624.0 million "as spending by consumers softened." Deposits are up 16% to GBP2.72 billion from GBP2.35 million'.

This is on a forward PE of 3.1, P/B less than 0.4 and pays over 8% div (with over 3x cover), consistently increasing working capital and no debt. Most of the trades today appear to have been sells. I was happy trading this when it was over twice the price and now it's an absolute no brainer! Am I missing some insider news here?

[jeff h] 29/12/2023 18:05

Next update will be the Full Year one for 2023 on 25th January 2024.

[apple53] 29/12/2023 12:10

Annoyingly I was right about the 690. Holding around there, though with some weird variations still.
Next news likely to be pre-close update. Was 19th Jan this year, with full balance sheet update. I'm confident they will mention an EGM for buybacks due to lower volume growth! [not]

[p1nkfish] 28/12/2023 00:30

apple53, I'm holding for a similar outcome and hope to continue to be paid to wait. A lovely little company, under appreciated.

[apple53] 27/12/2023 21:11

Thanks Pink. "as though" didn't mean I really thought they were; just one explanation among many. And I wasn't talking about after hours, just the very small trades at (suddenly) 20p higher in the last hour or so. STB is so illiquid anything can happen. A blockage is a reasonable story, but, ceteris paribus, I think our starting point tomorrow is closer to 690 than 710.

Does it matter either way? Not really. I did sell a smidgeon in the mid-600s, as I had massively loaded up at 600 and needed to deleverage, but would dearly love to be able to hold on to most of my holding to at least £10 (sometime in 2024? - look at OSB's recovery to see how 50% upside is not much to ask, with both stocks unfairly sold off to a similar degree).