Secure Trust Bank Share Discussion Threads

[brad_k] 07/7/2023 14:26

Difficult to understand the price capitulation given the majority of trades are clearly buys. If this is a SETS share I thought that implied no Market Maker involvement, so what is driving the price down?

[retsius] 07/7/2023 14:02

The chart is horrific.
R.

[catabrit] 07/7/2023 14:00

Feels like we’re getting a bit of capitulation here.

[brianblu] 14/6/2023 11:39

Still poor I was in Stb a few years ago wasn’t as bad

[brianblu] 14/6/2023 11:00

Terrible spread here puts investors off

[asagi] 30/5/2023 10:45

is it just me or has the spread narrowed significantly here? London Stock Exchange website now says bid:offer is 628p:630p.

Asagi (long STB)

[retsius] 25/5/2023 08:47

500 shares bought and the value of the company goes up 3.6%
You couldn`t make it up.

[linton5] 22/5/2023 13:13

Seller just keeps drip feeding away here 🤔🦊

[buffett4] 18/5/2023 16:49

Yes quite correct. The last tranche of subordinated debt of £50 million which as I understand it they paid off from the new tranche of £90 million was at a rate of 6.75%. So the rate has increased significantly but then we are in a higher rate environment anyway with Banks hardly being flavour of the month. The increase in rate matters little to their overall blended cost of funds because the vast majority of which comes from deposits and shareholders equity. At the last account there were around £2.5 billion deposits and over £300 million shareholders equity. Really pleased with today's trading update, disciplined lending and steady growth, excellent.

[1tx] 18/5/2023 14:43

Subordinated debt is a type of debt mainly issued by banks and should not be confused with normal bank deposits or bonds.It ranks for repayment after all other creditors except shares and forms part of regulatory capital,it is therefore considered high risk.STB finances its loans via bonds (term deposits) issued in the main to private individuals which usually have a duration of one to four years.95% of these bonds are of a size covered by Financial Services guarantees.If you go onto STB website you can see the rates being offered.Their rates are usually competitive upto 4.7% seems to be offered for 3 years.

[deanowls] 18/5/2023 13:15

You wish 😂

[archy147] 18/5/2023 12:04

Just bought another 395 @ 330 as the MMS kindly obliged my last request.

I didn't realise they read this board, thank you :)

[buffett4] 18/5/2023 11:31

Given the total portfolio is now around £3 billion, each 0.1% bad debt charge costs £3 million. Historically their bad debt charge has been around 1.5% per annum which if maintained would represent a cost of around £45 million, which would be perfectly acceptable in that it should still likely leave healthy profits. The high(ish) rate for the subordinated loan does indicate that the market is pricing in some risk, which is fair enough I suppose. I have an average buy price of £7.11 - there are 18.7 million shares in issue so I've bought in at a market cap of £133 million. Whilst it isn't without risk obviously, the value does seem to be underpinned by the shareholders funds in the balance sheet which were in excess of £300 million at the last accounts. I had a look at some other lenders banks, S&U sell at around £100 million over their shareholders funds while the others I looked at like Paragon seem to sell at a slight discount to their shareholders funds but no where near the discount offered by STB's current price in percentage terms. I could be wrong of course and this is not without risk however I do think on a risk/reward basis over the longer term that this offers good value currently. Hope so anyway.

[archy147] 18/5/2023 11:25

Agreed, the 633s are buys as that's what I'm currently being offered to buy more.

My buy of 395 shares @ 630p is also showing up as a sell.

[linton5] 18/5/2023 10:58

They 633s are buys usual @#@&@&@*

[archy147] 18/5/2023 10:42

Well somehow I managed to buy a few of these at 630p. Note to MMs: If the buy price dips there again I will happily take them off your hands again :)

[p1nkfish] 18/5/2023 09:25

I think there was/is another £5M with another ANX group company.

The £90M STB have will cover its own cost imho as credit conditions tighten and their customers wouldn't get that rate. So long as they have appropriate risk mitigation it's ok and I do believe they have those controls in place.

[p1nkfish] 18/5/2023 09:22

BTW, ANX took £1.3M from Secure Trust Bank, £15M from Blazey.

I cant find the rate on the STB loan to ANX and would have no surprise to find it > 13% + base rate.

ANX also have a £40M invoice discounting facility with STB due for renewal Dec 2024 and other arrangements under tight Covenants.

[johnhemming] 18/5/2023 09:19

The highish rate on the notes is not new, but to be honest with inflation as high as it is it is not surprising.

[p1nkfish] 18/5/2023 09:16

I can't for the life of me see that 13% not being redeemed early.

Its high.

ANX had to raise at 13% above CB rate paid monthly, £15M.

£90M at 13% with ability to redeem early, under these conditions, isn't so bad.

Not only that but STB acted early. Credit conditions are tightening so they got in early and well capitalised.

Not perfect ideal but a good compromise.

Dyor etc.

[archy147] 18/5/2023 09:09

Thanks for the responses.

I would happily buy the bonds if I could see them available for sale, but sadly cannot.

That leaves me with the question of whether to top up on the shares. Looks to me they are trading on a ridiculously low PE (under 4!?) which suggests any risk here is well priced in.

[spooky] 18/5/2023 09:01

13% is a lot to be paying, even for subordinated debt. Gives you a clear indication of what the market thinks about the credit risk here. Can also be an opportunity in the debt and/or equity if you disagree and are proven to be correct. That's what a market is all about.

[buffett4] 18/5/2023 08:54

Excellent update. Key risk in this economic environment is bad debts so very pleased to see low, stable arrears coupled with increased lending. I have been actively buying and the spread seems to come in at around 1.5% which is higher than I would like but since my holding period is 10 years plus it is of little consequence. I really like this business but I also couldn't understand the cost of the bonds at 13%, seemed on the high side to me, you would have thought they could borrow at lower rates. Anyhow it only represents a small proportion of their overall borrowing, the bulk being customer deposits at much lower rates, so I'm not overly concerned.