Secure Trust Bank Share Discussion Threads

[buffett4] 04/8/2023 17:15

Same here Catebrit- I was technically up to the maximum amount of capital I ever put in to one share but decided to top up with a couple of batches today at £5.58 then £5.59- 18.72 million shares in issue so values the entire business at c£105 million. I can't phathom the pricing at all, unless I'm missing something the business is surely worth considerably more than that. We deal with them on the car finance side, they have just nudged their rates up again actually. Hopefully results next week so lets see.

[catabrit] 04/8/2023 10:57

Added again today. Still a very small position for me but happy to scale up as and when cash comes in from other sales.

[nov31] 03/8/2023 19:30

No. £5 then bet your house on it! 😀

[retsius] 03/8/2023 14:31

is that a spark I see?
R.

[riverman77] 02/8/2023 19:01

Who knows if this is the bottom, but absurdly cheap on any metric and sure will do very well on a 2-3 year view. They have a fairly prudent lending approach so really can't see the catastrophic level of bad debts now being priced in.
On the 13% bond issue, this was a subordinated bond - these are used as a buffer to protect their capital ratio if it falls below a certain level. They always pay a high interest rate as they are high risk - they'd be the first to take losses if their capital position deteriorates. Not too cocnerend about this as it only forms a small part of their overall funding.

[retsius] 02/8/2023 18:38

How low can this go?

Must be near a small investment?

[p1nkfish] 24/7/2023 22:14

Could it be to do with the bond issuance at 13%? Those holders are further up the pecking order and once on board why would they maintain any shareholding exposure and associated risk or take any position?

Lack of buy interest.

[linton5] 24/7/2023 13:39

I honestly don’t understand what’s going on here

[buffett4] 19/7/2023 07:41

I think that is spot on Catabrit, they have a c£3 billion portfolio so even relatively small % changes in their bad debt charge can have a relatively large impact on profitability in the period. I wouldn't be surprised to see an increase in bad debts at some point but the market is pricing in a doomsday scenario- how can a profitable, well run bank with c£300 million shareholders funds making c£40 million profit per annum be worth £100 million. I could be wrong of course but I'd be amazed if STB aren't valued significantly higher in 10 years time. I set a capital limit per company that I invest in and I'm at the limit for STB so trying to stay disciplined and not top up but at these prices it is very tempting to break my own rule!

[catabrit] 18/7/2023 11:34

I think the market is pricing in a significant deterioration in credit quality and thus a wave of defaults as the big squeeze kicks in. I don’t think that’s necessarily wrong but what *is* wrong is not discerning between *who* will suffer and by how much.

A bet here implicitly assumes that STB will fare better than expected or that defaults won’t be as high as feared or that brisk new business with better margins offsets any write downs in the existing book of business.

You never know but STB has a good reputation for being quite prudent so I’m quite happy to bet at this discount to TBV and collect my nice high single digit coupon.

[cfro] 18/7/2023 10:37

You can't quite believe why the shares keep going down. It's getting on for a pe ratio of three. It's like, how cheap do you wanna buy this..

In the last Q1 update they told us that actually business was quite brisk with record new business and lending. Trading was inline with expectations for both the first half year and the full-year. Medium term plans and ambitions were on-track.

So are we missing something here we don't yet know about or are they just so unloved.

I can't see no reason why the dividend won't be around what they paid last year which was 16p (Any raises on this anyone?). Guess we will find out how trading has been early next month.

[linton5] 18/7/2023 09:12

I see arbb had very good results today hopefully secure trust can follow

[catabrit] 17/7/2023 10:35

Just nibbled at this again. It’s quite hard to resist considering the discount. It’s insane how cheap some U.K. stocks are at the minute.

[p1nkfish] 10/7/2023 17:39

Tend not to be too concerned if no volume behind it.
Big holders haven't bailed.
Just keep swimming.

[retsius] 10/7/2023 15:32

Pfish

Look at the chart, enough said.

[riverman77] 10/7/2023 07:53

OSB heavily skewed to mortgage lending , but STB more diversified with more of a skew towards retail finance. So they shouldn't be too exposed to the particular issue facing OSB.

[p1nkfish] 10/7/2023 07:42

18,713,089 shares, 66.6% held by those with more than 5%.
If it was down to the 3% level that would be closer to 70%+, no surprise if 75%.
Therefore only 6.25M shares are with holders holding <5% each.

Relative low volume sales and churn are pushing this down in absence of buying interest.

The last report mentions shareholders 70 times, more than some.

Dyor & GLA.

[retsius] 10/7/2023 07:12

1tx

Brilliant summary of the present malaise with the share price

They have forgotten about their shareholders, and this has never been addressed by any on the Board, almost oblivious that they are a PLC.
R.

[apple53] 10/7/2023 03:45

Presumably some fear stb has same problem as OSB. I don't have time to research this. If anyone has time to write to IR? If not, I may do later in the week.

[p1nkfish] 09/7/2023 16:25

None of the large holders have crossed a % boundary from what I see currently.

Volumes have not been massively high.

TBD

[buffett4] 09/7/2023 15:01

I think there is some general negative sentiment to STB and indeed Banks in general currently however the long term value of the business will depend on its performance. My money is on them performing over the next 10 years and therefore in a decade I think they will be worth considerably more than they are now. Short term as we know with markets anything can happen but I think those that have the temperament to ignore the short term fluctuations will hopefully be well rewarded. I could be wrong of course about the performance of the business and therefore the share price, things can go wrong with lending very quickly but STB seem cautious so I think they will do well over time.

[1tx] 09/7/2023 13:51

Unfortunately there is a "problem" with STB which I have mentioned before which means that the share price is likely to continue in an ever downward trend.It is quite simple almost nobody is interested in buying the shares.

When STB was split out of Arbuthnot Latham (ARBB) the very canny Sir Henry Angest the controlling shareholder in ARBB managed to sell its shares to institutional investors at prices up to around £19 sadly perhaps the company did not live up to expectations & in addition interest in investing in smaller newcomer banks also declined.The net result is that the original investors have taken a cold bath.

Whilst STB is a very well managed business & is profitable and has a credible business plan.It has failed to build any rapport with its shareholder base & realise that it now has one third the market value it original had;to maintain its value it has to attract private investors to replace original institutions.The management seems quite happy to manage this business to benefit themselves & its employees forgetting that shareholders who put up the original capital now have an investment worth about a third of the money originally invested....

[p1nkfish] 07/7/2023 17:00

Zooming out, we could revisit about 524p but hard to imagine and harder to imagine it going lower but it could.

524p low was week towards end of July 2020 and close to a 3 year round trip.
20 wk EMA has been in a downtrend since end of June 2016.
The round trip involved a bounce back up to the 20 wk ema but no convincing break through it.

Interesting, will it flatline and if so for how long?
Little to no positive energy at the moment.

[p1nkfish] 07/7/2023 15:56

Chart looks sick, no idea why a seller now. 1 month from results.