Secure Trust Bank Share Discussion Threads

[davebowler] 12/12/2024 12:21

hTTps://www.thisismoney.co.uk/money/markets/article-14182815/Close-Brothers-given-right-appeal-against-motor-finance-scandal-court-ruling.html

[p1nkfish] 11/12/2024 15:27

MSE had an interesting comment yesterday highlighting that ultimately the consumer can suffer due to future lack of lending, tighter credit and higher costs. Law firms will benefit, hence so keen to comment.

[diku] 11/12/2024 14:24

No doubt lawyers on both sides will be sharpening their pencils now...

[p1nkfish] 10/12/2024 17:08

All we need to know is what STB is on the hook for.
Just one thing.

[pvb] 10/12/2024 16:49

Car finance scandal could be as big as PPI, City regulator says



FCA lawyer admits scale of compensation could be larger than first thought, and as big as PPI, which cost banks £50bn

[flyfisher] 09/12/2024 10:17

The judicial review of the Barclays vs Miss L case commenced in mid october.
The result of that case may give some clarity to the broader case which is going to the supreme court.

[red ninja] 09/12/2024 09:41

Yes, I wondered if we would see a buy RNS, but no sign of one. Did market makers take it on knowing they could sell to market over time.

Is £3.46 the floor, I think we will only know that when the Supreme court judgement comes in. Some funds have have been selling out as they don't want to gamble on the future Supreme court ruling.

The BBC has a article which mentions that the FCA tried to get the Supreme court to speed up a judgement, but don't suppose that is easy for the Supreme court which is probably booked up.

[apple53] 08/12/2024 22:26

Thanks Red. 1m share trade at 3.46 on 5th. I haven't worked out what % hit on its funds Unicorn will have taken (assuming they bought £6-10), presumably not immense and so they preferred the hit over later being criticised for holding car finance stocks through the crisis.
The good news is someone was on the other side of this block trade. Does the absence of an other RNS mean that it was sold to a number of different institutions? Does that make £3.46 the floor?
And btw does the implied hit taken by STB mean CBG would be bust on the same basis? Should you short a modest amount of Close Bros to hedge STB?

[red ninja] 07/12/2024 16:08

I see Unicorn Asset Management Limited has sold it's 5.17% in Secure Trust Bank, RNS released on Friday.

[supearich] 06/12/2024 16:16

This shambles can't break the Bank... the actual Business done in Vehicle Finance year-to-year and any actual related commission, disclosed or not, isn't going to stack up to a massive amount... any eventual compensation related impact is already more than priced-in.

Consider that the Business will
a) disclose any/non commission related to all future Vehicle Finance arrangements
b) lower it's exposure to Vehicle Finance as a % of all Business and
c) charge more on all fronts in order to recoup any compensation related 'losses'

... THE ONLY WAY IS UP !!! BUY, BUY, BUY !!!

[red ninja] 02/12/2024 18:22

A vote of confidence in STB :-

Secure Trust Bank PLC ("STB" or the "Company") announces that on 29 November 2024 Mary Hartley, a person closely associated ("PCA") to Julian Hartley, a PDMR of the Company, purchased a total of 6,520 Ordinary Shares of 40p each ("Shares") in the Company at a price of £3.814 per share.

[red ninja] 02/12/2024 09:54

Roll up, roll up take your bets on the great Vehicle Finance Loan scandal.

Some investor will gain a fortune and some investors will lose a fortune.

Only six months to wait for the Supreme Court judgement.

[sandeep67] 02/12/2024 08:40

they will claw it back slowly with higher rates on new loans now - simples

[p1nkfish] 01/12/2024 21:53

Unfortunately she has no influence.
I agree with her too.

[apple53] 01/12/2024 20:45

Intriguing piece by Mary Dejevsky in the Spectator. I don't think I've read a better analysis anywhere.

[digger18] 29/11/2024 16:29

If the case is brought forward, it will be FCA pressure and not government.

[red ninja] 25/11/2024 12:40

P1, Unfortunately I fear you are right.
Hopefully we won't regret their inaction.

[p1nkfish] 25/11/2024 09:42

RN, if it involves a payout to consumers over business, Labour more likely to come down against business. They don't get commerce and wealth creation. Just not in this Governments DNA.

Let's see what happens to unemployment, might prove it.

[red ninja] 25/11/2024 09:21

He also said that Grant Thornton see this judgement as possibly leading to contagion into other areas like insurance.

I agree with Oliver Shah, but at the end of the day it is the Supreme court in 6 months who can put the brakes on the Appeal Court judgement.

I had hoped the Supreme court judgement could be moved forward, perhaps the Labour government could encourage them ?

[cfro] 25/11/2024 09:15

A good piece in yesterdays Sunday times by Oliver Shah. He was very critical of the judges decision. He says it should be over-turned in the appeal court as this is very serious.

Indeed so, i don't think most people are aware of just how serious this is. To think that some judge in some court can bring the gavel down which in one foul swoop has the potential to bring the whole UK economy to it's knees..

[buffett4] 24/11/2024 17:31

Agree, the potential discretionary commission liability is manageable and that the current price is a bargain if the commission liability only pertains to discretionary comms. If on the other hand it pertains to all commission paid then it is a whole different ball game and does indeed have wide ranging economic consequences.

[chabuddy] 24/11/2024 17:17

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!