Secure Trust Bank Share Discussion Threads

[p1nkfish] 23/4/2023 18:41

STB just won't meet his requirements but neither do other companies that make good investments.
It's called a market. Dyor etc. If his article helps push the price down I won't be complaining but will be buying.

[apple53] 23/4/2023 18:25

although well meaning a slightly depressing article from ukdividendstocks.
I haven't read every word but from the div comments I've seen it seems he missed the change in dividend policy (to formulaic) to allow for higher growth, so there will be further 'cuts' and rises as eps varies. And that the NIM has fallen due to closure of some higher margin business. And that return on capital is a function of changing regulatory requirements (ie a doubling of required capital) making it hard for a bank to achieve a double digit RoE while being very safely capitalised. The interesting point there is that much higher capital should mean safer bank and lower cost of equity, so a higher PE, but a) in my dreams! and b) SVB and CS scare people into thinking banks are not safer after all.

The thrust of the piece looked bang on, and I really am not trying to be critical, just helpful.

[mundungus] 23/4/2023 17:51

FYI
hxxps://www.ukdividendstocks.com/blog/secure-trust-bank-dividends

[brucie5] 19/4/2023 18:18

Value spotting: glad to see you hold this. But do you really run a three share portfolio, given other positions are closed? What relation to your bond holdings?

[value_spotting] 19/4/2023 17:58

Check out my latest post on STB! hxxps://open.substack.com/pub/eddielloyd/p/model-update-free-download-secure?utm_source=direct&r=267k4u&utm_campaign=post&utm_medium=web

[caughster12] 16/4/2023 12:06

Hey mate, do you have a link to the Canacord note?

[apple53] 14/4/2023 11:40

Good point catabrit. It's the "short marble" trade.

[catabrit] 14/4/2023 10:50

The most encouraging thing I’ve seen from STB is on LinkedIn; they have the most unassuming “new HQ” I think I’ve ever seen.

[riverman77] 14/4/2023 08:57

Good detailed broker note out from Canacord. On 0.4x book value and PE under 5 this looks absurdly cheap, especially given its good growth prospects and prudent approach.

[linton5] 03/4/2023 17:12

My trade never even showed up that’s a first

[retsius] 03/4/2023 13:00

I think a lot of selling is due to end of tax year balancing.

Cityfunds this AM gives a glowing appraisal and said could be a bid target.

The price has conveniently dropped down so it can go into next year’s ISA.
Dyor
R.

[cfro] 03/4/2023 08:57

A lot of additional info in that article thanks..
They've obviously been very proactive on the commercial lending front (a massive growth area despite the current SME subdued activity) and better than just simply concentrating on the boring old mortgage lending which is a highly competitive market.

[p1nkfish] 03/4/2023 08:30

From the Business desk today.

"The commercial finance arm of the listed specialist bank Secure Trust Bank has seen lending balances rise to £376.4m in 2022, up 20.1 per cent from 2021 (£313.3m).

Revenues at the Solihull firm have also seen a considerable 68.4 per cent increase, rising to £29.3m in the calendar year (2021: £17.4m).

The majority of the increase was driven by new business, as the firm delivered £157.3m in new facilities, up 63.6 per cent on the previous year (2021: £93.7m).

Facilities provided by the bank’s Commercial Finance arm include the support of a multi-million asset-based lending facility to Staffordshire-headquartered International Decorative Surfaces (IDS), the UK’s largest distributor of decorative services, as it completed a management buyout in partnership with private equity investor Chiltern Capital.

Secure Trust Bank Commercial Finance also provided a combined £12m facility to UK hobby and toy specialist Hornby Hobbies, made up from a £6m accounts facility and £6m inventory facility. It also enabled the UK’s largest woollen yarn spinner, Lawton Yarns, to return to private ownership with the delivery of a £13.4m total facility.

In partnership with Blazehill Capital, the bank delivered a £43m package for Northamptonshire pet food brand, Butcher’s Pet Care, consisting of a £25m revolving credit facility and an £18m non-amortising bullet repayment term loan.

David Parsons, regional managing director for Midlands at Secure Trust Bank Commercial Finance, said: “It’s a pleasure to share our latest results that showcase positive growth in new business, lending balances, revenue and clients. We are especially proud of our low client attrition rates, reflective of our ability to provide tailored funding solutions that genuinely aid the management teams we work with.

“In what has been another challenging year for SMEs across the UK due to a decline in economic activity, rising inflation and cost pressures, our focus remains on building relationships that allow us to thoroughly understand the opportunities and challenges ahead of each business, and react accordingly.”"

[retsius] 01/4/2023 21:55

Pinkfish

Many thanks

That’s what I kinda thought.
R.

[p1nkfish] 01/4/2023 20:29

My understanding, please correct if others know more.

Reversing an impairment needs proper justification to avoid non-compliance with UK banking regulations and can't usually be added back as they are adjustments to reflect an asset value reduction, recognised as a loss on the income statement.

[retsius] 01/4/2023 19:23

Can someone tell me if the impairments can be added back into the accounts if they are not actually needed?

[p1nkfish] 01/4/2023 17:50

I'm often wrong but do strongly believe STB is in a sweet spot.

They can become more Conservative quickly if need be and still out grow the wider economy imho.
Totally agree that a carefully run STB hitting problems = tin hats on everywhere.

[topvest] 01/4/2023 16:45

This bank continues to perform pretty well and is conservatively financed. I've held for a few years and well and truly underwater. The share price just continues to go down. At some point it will start going the other way, and strongly. If STB and ARBB get into trouble then we have bigger problems, as they are or certainly were cautiously run. Anyway, despite the ridiculously low price and good dividend, I haven't got the balls to buy more as I am not convinced in the merits of owning banking shares. At least its only a small position.

[catabrit] 31/3/2023 15:32

Hard to resist at this sort of price so after being flukey with top ticking the sales, I’m not going to ride my luck with trying to second guess the bottom. I bought some this afternoon. Really happy to own these down here.

[brad_k] 31/3/2023 15:09

Once again there are far more buys than sells (all those around 672p are buys) and the share price is very slow to respond. Good tight spread at the moment though, less than 2p, which may be encouraging some of the buyers.
So what is holding it down right now, it came down very quickly from 790p?

[p1nkfish] 30/3/2023 18:03

App to Pay can add a bit of growth.
Decent results. No fighting this market, just have to go with it.
Price will reflect results one day, paid to wait until then.

[brucie5] 30/3/2023 13:15

Thanks, apple. All understood.

[apple53] 30/3/2023 13:13

Thank you Brucie. Yes I am/was a specialist, though as I previously mentioned I pre-date the most complex capital calculation methodologies, and also the newish provisioning approaches (though the latter follow the method UBS used in 2000ish when I worked there, ie they are sensibly ex-ante and smooth profits). STB were silly in 2021 - I don't understand why they allowed their provisions to fall to zero.

I have no view on HSBC. STB I can vaguely assess in half an hour; HSBC would take a week to scratch the surface. I covered it a VERY long time ago.

Correct me if I'm wrong, but is the first time STB have led the statement clearly with pre-provision profit data bullet? A good idea.

Quite right cfro. Probably the cheapest healthy bank in developed world? And a growth stock?

Tricky thing is that they can get a better return ploughing capital into buybacks than marginal loan book growth....

[cfro] 30/3/2023 10:54

With earnings per share slightly over 180p, that make the historic PE just 3.8. With a dividend yield of nearly 7% not only is the company conservatively managed but also conservatively valued.

Of course, if the business then grows from here and profits increase then, as apple53 quite rightly points out about the payout ratio, the dividend will increase making the metrics around that even more attractive.

But who's mad enough and stupid enough to risk investing in a bank right now (I am Lol)...

[brucie5] 30/3/2023 09:07

Excellent post apple. You appear to be a bank specialist. Do you have views on HSBC at current levels?