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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Secure Trust Bank Plc | STB | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 18.00 | 3.14% | 592.00 | 16:35:25 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 578.00 | 574.00 | 590.00 | 592.00 | 574.00 |
| Industry Sector |
|---|
| BANKS |
| Announcement Date | Type | Currency | Dividend Amount | Ex Date | Record Date | Payment Date |
|---|---|---|---|---|---|---|
| 13/03/2025 | Final | GBP | 0.225 | 24/04/2025 | 25/04/2025 | 22/05/2025 |
| 14/08/2024 | Interim | GBP | 0.113 | 29/08/2024 | 30/08/2024 | 26/09/2024 |
| 21/03/2024 | Final | GBP | 0.162 | 25/04/2024 | 26/04/2024 | 23/05/2024 |
| 09/08/2023 | Interim | GBP | 0.16 | 31/08/2023 | 01/09/2023 | 28/09/2023 |
| 30/03/2023 | Final | GBP | 0.291 | 27/04/2023 | 28/04/2023 | 25/05/2023 |
| 04/08/2022 | Interim | GBP | 0.16 | 25/08/2022 | 26/08/2022 | 26/09/2022 |
| 24/03/2022 | Final | GBP | 0.411 | 21/04/2022 | 22/04/2022 | 19/05/2022 |
| 05/08/2021 | Interim | GBP | 0.2 | 26/08/2021 | 27/08/2021 | 27/09/2021 |
| 25/03/2021 | Final | GBP | 0.44 | 22/04/2021 | 23/04/2021 | 21/05/2021 |
| Top Posts |
|---|
Posted at 19/3/2025 10:19 by apple53 Yes I did listen. It is definitely worth the time if anyone has or is considering a substantial medium term position. Personally I am impressed and believe there will be a big bounce in adjusted eps in 25 or 26 at the very latest, putting the stock on about 3-3.5x, even after the share price recovery.There should also be the original presentation on youtube, no? I think I spotted it last week but didn't listen, but I'm not sure if there is a Q & A. On Engage, Phil seemed to ask (paraphrased) essentially every question submitted (including all of mine) and, even though answers were often partial and guarded, overall it was pretty useful. I could write more but my high level conclusion is below (I posted this on CBG just now where there is more activity, and forgot to note that they see the 12% T1 ratio minimum as non-negotiable, which confirms the confidence I noted in posts above): QUOTE So even after the jump in STB's share price, it is cheaper on a PE than CBG using analyst estimates. I have a large holding in STB still. The glitch for me (other than no disclosure on motor finance until the results) has been that analyst estimates (marketscreener rather than stocko which I can't see) had not come down for 25 and 26, while I thought they should have put at least a motor finance hit into them. Well STB results were very good on the all important operating basis (check thread) with impairments continuing to drag down eps. If you listen to one of the two presentations you get very good explanations and there is a high probability of a sharp fall in impairments in 25 allowing the new higher operating profit base to shine through, so earnings power over the next couple of years is 250-300p (share price 575p). Ironically this means that analyst forecasts, at least for 25, might be about right. [NB despite the good results one analyst has already tweaked down 25, but I think it's more of a rounding error, or a catch up since the stock is so small they rarely revise it]. The motor finance provision, based on 37 scenarios weighted for probability, is extremely modest. They accept two way risk, but given they are close to the 12% stated T1 minimum, they must believe that additional downside is very limited (note they grew the div, and still plan to growth the balance sheet materially). UNQUOTE |
Posted at 14/3/2025 11:40 by apple53 Thanks FlyYes you have been correctly flagging the pressure on deposit raising and margins due to repayment of Covid funding. That's why I thought the margin development was surprisingly positive. From what you say I think you do at least in part share my view on the capital position - if they were particularly concerned they would have cut the dividend. [Admittedly there is little difference in capital terms between 5% growth and flat, so if they didn't cut it I guess they would always show willing by growing it a little.] They have only £8.6m of T1 capital above their targeted minimum, ie 45pish (feel free to check my figures). So if they really thought that the motor finance could be much bigger than their provision, they would surely have stopped the dividend, even if they think their cost of risk should fall in 25. And continuing to drive loan growth will also eat into it. So my point above is either they are being irresponsible or they have very good reasons to believe the impact of further vehicle finance provisions, and bad debt provisions will be manageable. |
Posted at 13/3/2025 11:28 by flyfisher apple, the market was so thin on opening that i had to split an £8k deal in half.I thought the vehicle finance announcement was very positive, although stb could still get caught out with the FCA blanket decision, i feel that if there was heavy concern over this, then the dividend would have been passed. Accordingly i feel more comfortable, although i would like to know if they have any broker indemnity agreements. I do not share your view on capital position. STB is mainly depositor funded, fortunately they have managed their depositor base well and it has increased, however some of the increase has had to go towards repaying TFSME. I guess that increased competition for deposits have crimped margins a little over the last 18 months as lenders compete. To me it seems logical that they will continue to offer attractive depositor rates until tfsme is repaid, after which they can start to seek growth along with higher margins. |
Posted at 13/2/2025 23:24 by ball deap Based on Close Brothers Mcap of 870£m and STB 87m£ , I estimate up to 16.5£m STB would need to set aside for compensation. |
Posted at 12/2/2025 09:49 by apple53 Check the CBG thread for more on the claims management process. I believe the defendant pays a lot whether it loses or wins. Not sure if this is meant to be changed.I was hoping someone could take the CBG 165m figure and scale it for STB's history. I'm pretty sure STB has been cleaner, with the variable commission finishing in c. 2017. I can't find the relevant press release. CBG has a £2bn vehicle finance book at present, vs £250m for STB. |
Posted at 24/12/2024 12:51 by p1nkfish Isn't STB probably toast then if those figures are close to correct and costs are as roughly estimated?The 900K was estimated from the FCA info in November 2024, 1% of those was based on the STB being a very small player, hence 9K so far. There was a number bouncing around some time that STB peaked at 1% of the market as crowded out but the likes of Lloyds, Barclays, Close Brothers ++. If your numbers are correct then STB may not survive the hit. Tragic. |
Posted at 23/12/2024 19:08 by p1nkfish It's too complex without guidance from STB.If the £1.04Bn is correct does it include lending to cover the cost of car stock, that is not consumer car finance lending and shouldn't be "fair game"? As for the £2.11Bn, we don't know what the effect of changes made by STB in 2021 are. "STB had ~ £1.04bn in motor finance new business lending between its creation in 2009 and FY2020, with this increasing to ~ £2.11bn if we measure up until FY2023." In the absence of any clarity I would expect the market to assume the worst. |
Posted at 23/12/2024 18:58 by chabuddy In my head, I am trying to plan for the worst, which involves assuming that every commission is being looked at, irrespective of whether a DCA is used. However, once you consider such a scenario, it is not the settlement fee but rather the administrative costs that will be burdensome. This is a cost that STB is already incurring (and will largely have to incur irrespective of the Supreme Court's ruling).STB had ~ £1.04bn in motor finance new business lending between its creation in 2009 and FY2020, with this increasing to ~ £2.11bn if we measure up until FY2023. Assuming that 50% of those who took out deals claim, that 75% of the deals are found to be unfair, and that dealer commission was 2.5% of the loan amount, compensation for loans up until 2020 (including interest at 8% for 10 years) would be £17.56m. If we assume that the average loan amount was £4k, the implied number of claims over the period would be ~130k, and with an estimated administrative cost of £200/claim, this would yield an administrative cost of £26.02m. In other words, out of the estimated base cost of £43.58m, administrative costs account for ~60%. Assuming that loans up until FY2023 are also included, the total cost rises to £88.5m, with £52.84m being due to administrative costs. The implication here is that over 50% of the total cost to STB is fixed, and won't change based on the Supreme Court ruling. The most sensitive input towards total cost calculation is the claim rate (the % of eligible claimants who initiate a claims process). Given ~£100m came off of STB's market cap due to the motor finance scandal, it looks like the the market is pricing in a scenario that leans towards my downside, which involves all motor finance loans ever issued being considered fair game. |
Posted at 24/11/2024 17:17 by chabuddy STB's January 2024 Trading Update stated that between 2014 and 2017, a "mid-single digit proportion of [their] new vehicle finance loans included [discretionary commission arrangements]".Each FY earnings between 2014 and 2017 confirms that the majority of new business lending was for used rather than new cars. Assuming that 'mid-single digit proportion' = 7% (higher to be conservative), that 50% of new business lending went to new cars (will be less than this, but trying to be conservative), and that they used discretionary commission arrangements for the full year in 2017 rather than only half the year (and the same in 2014, given STB provided no clarity on this; this is conservative given that Moneyway — one of STB's motor finance lending platforms — stated that they stopped using these arrangements in June 2017), I estimate that ~ £15.6m was lent that involved the use of discretionary commission. Redress doesn't equal full refund, and even after applying prejudgment interest I think £15.6m can be seen as the upper bound for the discretionary commission arrangements (the actual figure likely less than half of this). STB's market cap decline of > £80m post-judgment seems to suggest that the market views a risk of redress for non-discretionary commission arrangements as well, with a consumer rights head saying that "anyone who has already been told by their finance provider they didn’t have discretionary commission on their loan should now be asking if any commission at all was applied." Clearly the FCA have sh*t the bed on this one, but if significant redress only applies to discretionary arrangements then it looks like STB will be fine. If it applies to non-discretionary arrangements, this will have wide-sweeping consequences across the entire economy, and won't be just limited to motor finance firms. I personally think at ~£3.5/share, this is increasingly looking like a really good punt, given that pre-judgment sell-side consensus implies that at the current share price it would be trading at < 1.5 P/E within 2 years! |
Posted at 16/10/2024 13:15 by smithie6 a comparison of STB shares with the shares of another lender, MFX.========= btw another company doing lending in the UK, lse:stb ..it has a p/e of ~6, double the p/e of 3 for MFX. I guess that MFX perhaps deserves a lower p/e because with a cap. value of only £18m many institutions/fund surely are not able to own any shares in MFX, (& some PIs avoid companies with such a small cap. value) whereas STB has a cap. value of ~£150m, where many institutions/funds are allowed by their own rules to invest. but being half price in comparison, that looks way overdone imo. ------ How do STB & MFX compare for growth 2019 & 2023. Revenue (data taken from financial summary page of advfn) STB. £165m. £185m. % increase = 1.1 MFX £26.7m. £53.3m % increase = 2.0 (revenue 2023/revenue 2019) (MFX. doubling the revenue in 4 years, impressive) For revenue growth MFX wipes the floor with STB, yet the p/e of MFX is half that of STB ! Doesn't make sense imo. imo either STB is too expensive or MFX is too cheap ! |
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