Secure Trust Bank Share Discussion Threads

[casholaa] 07/11/2024 10:36

Rate cut expected today.

[omvi] 06/11/2024 15:20

Depends what they say in their trading statement due on 13th Nov. I think the market has now priced in the court judgement.

[casholaa] 06/11/2024 10:16

What are the odds of seeing 400p within the next 3 weeks?

[checkers2] 04/11/2024 21:04

I use research tree

[omvi] 04/11/2024 19:29

How do you see broker notes?

[flyfisher] 04/11/2024 11:14

Broker note from the company broker Progressive out today.

Standard rose tinted drivel. But may be responsible for a rise today.

[buffett4] 02/11/2024 17:54

I have seen some confusion in the press about the current situation but I think this article sets it out correctly so thank you for sharing.

[ball deap] 02/11/2024 17:33

https://oilprice.com/Finance/the-Markets/Secret-Commissions-Trigger-Potential-Market-Meltdown-for-UK-Car-Lenders.html

[checkers2] 02/11/2024 13:46

This is an extract from Shore's note published yesterday;

Valuation and recommendation: STB’s shares have dropped 29% since the Court of Appeal’s decision on commission disclosure requirements for motor finance lenders was revealed last Friday. As a result, the stock is now trading on an FY24F P/TNAV of just 0.3x versus management’s medium-term guidance for delivering an adjusted RoE of 14-16% (assumed to occur once the loan book reaches a target £4bn level, which we expect to be achieved around the end of FY25F). If this can be delivered, then we believe the stock has very significant re-rating potential. However, in the near-term, the investment case is likely to be overshadowed by the ongoing uncertainty in the motor finance industry caused by the Court of Appeal’s recent decisions. We have reduced our fair value to 1,650p (from 1,750p), to reflect our forecast downgrades. This equates to a P/NAV of c.0.9x and implies almost 200% upside. However, this does not current include any potential legacy redress impact from the ongoing issues in the motor finance industry, which are currently too uncertain to quantify with any degree of confidence but could be significant.

[cousinit] 01/11/2024 16:58

cfro - I think the reality with these judgements is that the cases that are put forward for consideration include the most extreme that have been identified where the documentation is complete and (most likely) also poorly worded.

To have a situation where the buyer has to take out another loan to cover the commission for the dealer is pretty disgraceful.

As ever, the worst actors then bring the rest of a sector into the firing line.

Given the dysfunction in the asset finance market, where a number of lenders have now stepped back, this should focus the minds of the regulators (and government) to quickly find a workable solution. One aspect is also how the regulator will assess the solvency of lenders given the level of uncertainty and whether they have sufficient capital to offer new business. Likely that those that are left will now aim for higher margins.

[buffett4] 01/11/2024 16:32

V12 operate in the prime market and commissions tend be based on a % of the loan advance, I would say 6% is probably around average. Moneyway operate in the near prime market which tends to pay a flat fee commission regardless of the size of the advance, £400-£600 is normal. If you worked on an average £600-£700 a deal that is probably not a million miles away although some will be much higher and others lower

[gabi888] 01/11/2024 16:23

Any rough idea how much is the commission the dealer gets from the lender, for a typical loan?

[cfro] 01/11/2024 15:56

Exactly, why wouldn't you expect the middle men to take a cut? Nobody cares about that as you say, all the consumers care about is whether they can afford the monthly payments on the new BMW or Tesla..

Any judge worth their salt and possessing an ounce of commonsense should throw this out of court..

But we live in a world where bankers are hated and any blame is always thrown at them and ulitmately end up paying.

[digger18] 01/11/2024 14:36

The world has gone mad! Sue Sue Sue and legal companies reap the benefits! If I take out a loan on an asset, all I care about, is how much I pay per month, I have no interest in commissions to anyone. I certainly would fully expect middle men to get a commission.

[red ninja] 01/11/2024 14:23

I read that the Supreme court ruling will be May 25.

[onwego] 01/11/2024 14:17

Interesting segment on this sector on BBC R4 business news this am (6:15am), mainly focused on CBG LN. My understanding is that the appeal could be months off, which leaves the sector in limbo. As we all know, banking is a confidence business.

Post #963 asks "why fines" - because it appears they may have broken the law.

[red ninja] 01/11/2024 14:02

That's the thing if the Supreme court rejects the Appeal court ruling then the current share price should recover. However, if the Supreme court back the Appeal court ruling
then it's going to be difficult.

In the Times yesterday a former regulator slammed the FCA for providing a lack of clarity in it's rules which let in this Appeal court judgement.

[buffett4] 01/11/2024 13:28

In terms of the size of compensation amount, I dont think it would be relevant to look at the size of the current loan book because many customers will have fully or partially settled their agreement, in yet still could be eligible for compensation. I'm not sure how far back the claims could go but assuming it isn't time limited then in theory it would be for the full amount of commission they have ever paid on every car finance agreement plus interest on top. I dont know the exact number but under those circumstances it is likely to be substantial. I think the best hope is either the Supreme Court ruling or some action against the FCA, otherwise it would feel to me as if a capital raise is potentially on the cards since removing the dividend is unlikely to cover it. Please dont rely on this, I am not a legal expert and could well be wrong.

[johnhemming] 01/11/2024 13:27

If they paused business then restarted one would assume thy think their non DIC business is safe.

[casholaa] 01/11/2024 13:25

I'm over 42% down.

[pvb] 01/11/2024 13:14

Oops! :-(

cfro 1 Nov '24 - 07:35 - 943 of 964

Doesn't look like the bottom yet - more problems in the vehicle finance division.

Indeed.

Secure Trust Bank PLC Trading Update
01/11/2024 7:00am



"We are disappointed that it will take longer than expected to recover value from the excess level of defaulted Vehicle Finance balances, and the recent Court of Appeal decisions have added additional uncertainty on the benefits to be realised in 2024.

Notwithstanding the near-term impacts of the excess defaults in Vehicle Finance, we have seen arrears in Vehicle Finance fall to the lowest level since 2021, have continued to grow total net lending, continued to optimise our cost base, made good progress on early repayments of TFSME funding, and see continued growth opportunities ahead of us."

[deanowls] 01/11/2024 12:58

Why fines though? They have complied with FCA, guessing it would be compo.

As for the collections I’m guessing people spent the money whilst it was paused, company can’t charge interest as they paused it now it will hit their margin as the loans are extended. Repossessions being sold into a falling car price market?

[muffster] 01/11/2024 12:57

Ouch.So maybe now is the time to do a buffet and buy in when the tide goes out ....thoughts?