Secure Trust Bank Share Discussion Threads

[miti 1000] 23/2/2022 16:40

rimau1 ,

Interesting news regarding Co-op which you suggested might want to buy STB previously as a bolt on...

hxxps://news.sky.com/story/co-operative-bank-hires-bankers-to-spearhead-renewed-bid-for-consolidation-12549471

[belgraviaboy] 14/1/2022 17:43

Under the radar, conservative and far too cheap....

[rimau1] 14/1/2022 09:40

Yes agree with all that Miti, good summary.

[miti 1000] 14/1/2022 09:00

This is me,

Worth bearing in mind that ARBB have now finally sold their stake in STB which was well over 30%.That has created a big overhang on the share price over the past 3 years,

Also STB is thinly traded and tightly held.

The new CEO is way more proactive in promoting who STB are, witness the 1st ever CMD in November. If the economy holds up , there is no reason why STB cannot double from current levels in 5 years. Its way too cheap and there's a 4-5% dividend whilst we wait.

[miti 1000] 14/1/2022 08:53

Yes, that's correct but its now backward looking. Going forward, impairment charges will normalise ie. will be higher than FY2021.

I'm hopeful the dividend will be much higher than forecast on 24th March results.

[miti 1000] 14/1/2022 08:20

rimau1,
I'm confused why you think impairment assumptions are lower ? They are in fact higher for FY2022, and as the business grows will surely be higher to keep pace with the 15% growth target. No bad thing anyhow but does keep a lid on FY2022 forecasts to some extent.

[rimau1] 14/1/2022 08:11

STB is very different to 5 years ago, I always use Tangible Book Value as a guide and we will get confirmation in March but is should be around £17-£18 so this is a realistic short term target IMO. Of course STB would make a noce bolt on for one of the mid tier challengers (Co-Op most likely) as all banks are trying to aggressively grow their loan books. 1.5x take out would be £25

[this_is_me] 14/1/2022 08:00

The share price reached £34 around 5 years ago. Any chance of it getting back to that level inside another 5 years?

[rimau1] 14/1/2022 07:17

The core loan book growth is excellent, STB has smashed Q4! With rising base rates, lower impairment assumptions and the post covid rebound STB is set fair to rerate. I will also top up at Time Finance before their update which is scheduled for next week as there is a nice read across IMO.

[rimau1] 07/1/2022 15:49

Time Finance is a much smaller peer to STB that i have also recently invested in. Low rating, significant discount to TBV and like STB should benefit from any form of post covid bounce with a rising interest rate environment providing a helpful tailwind. Niche loan origination is a nice sector play for 2022 IMO.

[rabiddog] 16/12/2021 15:28

Yep good time to buy I think. Going to be a good period for well run finance houses -STB one of the best.

[rimau1] 16/12/2021 13:42

Well with interest rates finally rising STB have timed their growth phase well. Margins will have a nice tailwind. I added on the dip below £1300 yesterday, probably picked up RCturners stock!

[rcturner2] 10/12/2021 10:05

I sold my shares in STB yesterday. Good luck to all who remain.

[tole] 06/12/2021 19:08

https://masterinvestor.co.uk/equities/small-cap-comment-featuring-mrl-town-mtc-and-crc/Secure Trust Bank (LON:STB) – almost half 'fair value'This Solihull-based consumer and commercial banking specialist is expecting to see the next year slashing its pre-tax profits from an estimated £52.7m for the year to the end of this month, to just £36.3m.That is due to loan impairments and provisioning.Earnings are expected to be around 226.5p this year and falling back to 156.6p per share next year, while the dividend could fall severely from 56.6p to 39.1p per share.Even so, analysts Pedro Fonseca and Andrew Mitchell at Edison Investment Research estimate that the group's shares have a fair value is 2234p against the current 1330p.The shares touched 1420p in early August this year, so we may not have to wait too long for my price objective to be scored.The Q4 Trading Update is due next month.

[tole] 26/11/2021 06:25

Tempus buy recommendation.Secure Trust BankBank stocks had become synonymous with beefy dividends until they were forced by the regulator to hold back cash during last year's turmoil. Shareholder returns are back on the table but the premium ratings that had accompanied shares in small banks are not, which translates into some juicy dividend yields in the sector.Take Secure Trust Bank, for example. Its shares trade at about a 20 per cent discount to forecast tangible net asset value at the end of December, despite it announcing that pre-tax profits this year will be at the top end of analysts' forecasts.However, the Solihull-based bank is tempering dividend payments with holding more capital to fuel an acceleration in its loan book growth to a compound annual rate of 15 per cent over the medium term against last year's level. In August it set out a new dividend target to pay 25 per cent of earnings, replacing a previously progressive policy, under which dividends have in some years exceeded the new threshold.That doesn't have to be a bad thing for income investors. Hitting its new lending target could have a benevolent effect on earnings if it can keep impairments in check. Growth will come mainly from its existing lending lines: retail point of sale and motor finance to consumers and residential development and invoice lending to businesses.Like its small banking peers, Secure has been pushing to expand the number of its retail banking customers, amassing more deposits that provide a lower cost of funding for the bank., helping to fuel a rise in the retail finance loan book.There's natural risk associated with customers defaulting on repayments, but Secure's record on that is sound. Impairments this year will be lower than the market consensus of £12.9 million and analysts at Peel Hunt, the broker, estimate such charges for this year at £1.2 million, or a cost of risk of 0.05 per cent, compared with 2.1 per cent last year.After dividends were reinstated at the half-year point, this year's total payment is forecast by analysts to be 50.9p a share, equivalent to a potential yield of 3.9 per cent. That's an income that looks more secure.Advice BuyWhy The shares look good value and there is a generous dividend on offer

[rcturner2] 17/11/2021 14:35

Not my sort of thing. Far too much political risk.

[brucie5] 17/11/2021 12:29

RC have you taken a look at IDHC? Or are you put off by its geography?

[rcturner2] 16/11/2021 10:08

This is a good and well run business that has navigated the pandemic very sensibly.

[brucie5] 16/11/2021 09:54

The two year gap goes up to 1600.

[rimau1] 16/11/2021 08:30

Unemployment now back at pre pandemic levels and base rates to gradually rise, its perfect market conditions to grow a profitable loan book.

[rimau1] 11/11/2021 07:45

Arbuthnott have sold their remaining 2% in STB yesterday. I wonder who snapped them up, i have placed a cheeky limit order for any short term price volatility

[johnhemming] 06/11/2021 18:51

I thought the presentations were quite good. (at the CMD)

[miti 1000] 03/11/2021 10:00

Capital markets day started for those who want to listen in via. zoom link in RNS.