I think the oldest complaint went all the way back to 2014 so if this stands liability is for all car finance commission paid between 2014 and 2024, it is a small number in relative terms for the market but it is a potential huge liability for STB. Question is how many deals have they written during that time and what their average commission is. The latter is likely to be around £600 per deal, I'd need to have a dig around through 10 years of accounts to make an estimated guess at the former, its huge though. |
STB is a bit player in this.
Granted they are small so won't be able to carry the impact like Lloyds and bigger players can but their exposure is also relatively small.
Would be useful to have some numbers to help define the potential problem. |
Article in Times today states Moody’s putting the size of this scandal now at £30 billion. STB not mentioned in article.
Note, the size of the impact if any on STB still not known.
RNS from yesterday shows Farringdon capital has sold 1.5% of STB. |
Remember Equitable Life! :-| |
That’s not a given Red! The current judgement also potentially covers fixed commissions and not just undisclosed.
It’s a big unknown and we can only hope that common sense prevails with the final decisions. |
OMVI
I believe you mean the Supreme Court will rule against compensation were it was within FCA guidelines. |
I could not agree with you more OMVI- spot on. |
The whole industry had to stop issuing loans after the judgement. It’s not just STB. Honda wouldn’t allow people to pick up their cars for a week even on already agreed loans.
It’s just a huge unknown until the court of appeal judgement. I think it’s unfair to expect business to comply with FCA rules then tell them they owe compensation for something within the FCA guidelines. I can’t see how that’s appropriate and hope the court of appeal will rule against compensation where it was within FCA guidelines. |
The Appeal court extended the problem to undisclosed commission.
Secure Trust Bank stopped motor finance for a period while they reworked their offering.
Thus that suggests that they may be on the hook for undisclosed commission in the
past although we cannot be completely sure of that as the company is not exactly forthcoming as to it's new liabilities.
Added later
Note, we won't really know for another 6 months or so if the Appeal Court ruling will stand or not. |
Hi Supearich, I hope you are right in that the potential liability 'can only relate to a small(ish) % of those figures and NOT every transaction' - what is your rationale for concluding this though? I have worked in the car finance industry for the last 30 years and that is not the current generally accepted view in the industry, although we do indeed very hope it turns out that way. |
Secure Trust Bank (STB) Capital Markets Event - November 2024
Secure Trust Bank management provides an overview of its Commercial Finance Business and its role in helping the business achieve its medium-term targets.
The Commercial Finance management team outline the product offering, the size of the market, the team’s track record, further growth opportunities, the recurring revenue benefits of the model, as well as their approach to structuring and risk management.
Watch the video here:
Or listen to the podcast here: |
This is interesting, published today by the FCA.
My main concern. Is the final judgement (Ie appeal accepted or not) and potential implications for “Fixed commission” to dealers. I guess it depends how transparent the documentation was, at the point of acceptance. |
Might be limited in actions they can take until picture becomes clearer. The shutters come down to avoid any insider dealing allegations. |
mundungus 12 Nov '24 - 18:05 - 995 of 996
John Lee sold his holding based on issue talked to car financing loans and increase in loan collection issues. Parting comment in the IC interview he hoped they survive.
Um... Worrying.
And no sign of management buying shares. |
"A live webcast of the presentation including Q&A will be held today at 14:00 pm for investors and analysts and will be available via our website at https://www.securetrustbank.com/ or on https://brrmedia.news/STB_CMD. This will be available for playback after the event. The Group will not provide an update on Vehicle Finance business at the event." |
John Lee sold his holding based on issue talked to car financing loans and increase in loan collection issues. Parting comment in the IC interview he hoped they survive. |
Big day tomorrow. GLA. |
I would be shocked if there were no or poor records of credit transactions, commissions etc.
The whole thing is complex and although potentially very impactful I think some of the sell-off is "if you're going to panic, panic early". |
I suspect it depends on the existence of records. |
Would br a start if they defined the period over which there may be liability and the number of transactions over that period. |
They need to provide some certainty. Also, my uneducated guess from googling, would be any commission paid plus interest from the date of the finance agreement at a commercial rate of interest. |
Isn’t the IGIndex holding just punters buying through IGIndex.
However, with the impact of the Appeal court ruling on STB unknown and what the Supreme Court may rule unknown it is a gamble.
It may be a bargain or maybe Not.
I am not sure the trading statement will make things clearer either.
DYOR |
FIL about halved and IG come flying in with about 3%. I'm guessing motor stuff and cut in base rate are negatives but IG see an upside?I have enough shares, so I opened a sb earlier. |
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