Secure Trust Bank Share Discussion Threads

[linton5] 11/10/2019 16:13

Holding rns next week for sure guys biggest volume I've seen in a while here 😬

[linton5] 11/10/2019 11:59

The only bank in the red today mmmm

[pvb] 02/10/2019 17:06

How on earth can a "price" (of anything) be "manipulative"?

[linton5] 01/10/2019 13:16

Yes you forgot to say the share price is as manipulative as it comes shocking by the mms

[checkers2] 01/10/2019 13:09

Ennismore recently adding to their existing position. This excerpt is from their Jan 19 newsletter

Secure Trust Bank is a GBP 260m market capitalised, conservatively managed, specialist UK lender. The company is very
shareholder return focussed and dynamically managed, being wary of the available returns adjusted for default risk. This
ability to assess risk, enables them to act quickly and stop lending into a segment if they feel returns are no longer
satisfactory and has enabled them to build and maintain a relatively small but well diversified loan book. The decision in
the last couple of years to pull out of two different areas - subprime lending for motor purchases and specialist residential
mortgages - bears testament to this. A further example of the management’s strong focus on creating shareholder value is
the sale of the Everyday Loans Group in 2016 at two times book value, leading to an equity gain of around GBP 120m
having paid GBP 1 for the business four years previously. This has helped them to generate more than GBP 250m of
accumulated net profit over the last 7 years.
As of the end of June, the company had a loan book of around GBP 1.8bn across various sub segments, generating an
overall revenue margin of about 8.5%, which compares favourably to a provision rate of less than 2%. We feel the
business is over resourced for a specialist lender, perhaps being prepared for a substantially bigger loan book over time.
This generates a current cost to income ratio of over 55% which we would expect to improve in the medium term. Given
the risks for this type of business however, we would definitely prefer an over resourced to an under resourced company.
Real estate finance and retail finance, which grew 30% in first half of their fiscal year, are two main areas of lending and
account for around two thirds of the loan book. Real estate lending focusses especially on the institutional buy to let
market as well as lending into the residential house building sector. Retail finance lends to consumers via retailers in areas such as jewellery, sport season tickets, furniture and bicycles, typically on 12-month interest free type deals, receiving a
fee from the retailer plus any future interest. The other main area of focus is for used car financing (15% of total lending)
which, as already mentioned, was pivoted away from subprime consumer categories.
Going forward, we expect Secure Trust Bank to grow further in niche sub segments within the consumer finance area as
well as focussing more on higher quality customers within the motor area. Recent hires with experience in the car lending
market as well as investments made into their digital platform will assist here and we believe this could have a material
impact on profits in the medium term.
Clearly the cloud of Brexit is currently a worry for all UK lenders, but we do feel that the management at Secure Trust
Bank will create value over the coming number of years whatever the outcome. More than 90% of its funding comes from
retail deposits which we prefer in terms of funding uncertainty in a worst-case Brexit scenario.
The business generates a return on equity of over 13% which means that they may slowly absorb capital as they are
growing their loan book at a double-digit rate alongside paying out a growing healthy dividend. Although we don’t
expect it, if further capital was needed going forward then given the company’s historic value creation, we expect them to
be well supported.
Overall, we see the stock as having strong tangible equity backing on our forecasts of around GBP 240m by the end of
2019, with earnings growing close to 20%. This after paying out a dividend yield of 6%. Over time we expect the business
to leverage their well invested cost base by further value accretive lending, giving good quality earnings momentum and
an increasing return on equity. Putting the business on a multiple of 1.4 times tangible book for 2020 gives a total return of
over 60% over the next two years.

[masurenguy] 06/9/2019 16:14

Did You Manage To Avoid Secure Trust Bank's 42% Share Price Drop?
Simply Wall St, 29 August 2019

We wouldn't blame long term Secure Trust Bank Plc (LON:STB) shareholders for doubting their decision to hold, with the stock down 42% over a half decade. The falls have accelerated recently, with the share price down 13% in the last three months. This could be related to the recent financial results.

During the unfortunate half decade during which the share price slipped, Secure Trust Bank actually saw its earnings per share (EPS) improve by 10.0% per year. So it doesn't seem like EPS is a great guide to understanding how the market is valuing the stock. The steady dividend doesn't really explain why the share price is down. While it's not completely obvious why the share price is down, a closer look at the company's history might help explain it. As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Secure Trust Bank's TSR for the last 5 years was -24%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

Secure Trust Bank shareholders are down 19% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 1.9%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 5.3% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround.

My perspective: H1 profit was up by 20% to £18.1m and the current shareprice is circa 7.5 x the current year profit forecast and 6 x the projected profit in 2020. Current yield is circa 6.7%. The latest Peel Hunt note on 29 August recommended a reduction in holding with a target price of 1295p. This level has now been breached and we may now be close to the bottom with a potential value proposition re-emerging. I have no existing position here but it is on my watchlist.

[this_is_me] 15/8/2019 22:45

Tipped in the Chronic Investor out tomorrow. "...a high-yielding stock with good prospects for earnings growth. Buy."

[linton5] 09/8/2019 14:41

Ok got funds will see if they drop her under £13 for next week then I’m in gla

[topvest] 07/8/2019 21:27

Nice steady progress. All banking stocks seem to be low at the moment, but are probably factoring in a recession in the next 1/2 years.

[linton5] 07/8/2019 14:13

The fear in the markets is the reason which ain't bad just keep er down for a while yet or lower please

[this_is_me] 07/8/2019 12:18

the results haven't stimulated a big rush for the shares!

[linton5] 07/8/2019 09:22

Trying to get funds to get in here again to good a price and 84p divi gradually lifting every year,only 18 million shares so few about

[this_is_me] 07/8/2019 08:11

Yes, great progress again.

[rcturner2] 07/8/2019 07:52

Superb results today.

[linton5] 06/8/2019 22:48

Let's hope stb can keep up the good progress this stock I feel is so undervalued, results tmmw will tell

[archy147] 04/6/2019 16:48

Well is is something at least


Secure Trust Bank launches stock, sale and repair funding service

04/06/2019 in Supplier News

Secure Trust Bank hopes to bring more independent and small franchised dealers on board after launching a new proposition blending wholesale finance, stock sourcing and consumer finance for car purchase and repairs.

The Solihull-based bank, which has operated the Moneyway brand in the near-prime motor finance sector since 2009, has now launched V12 Vehicle Finance, with a vision of being a financial services hub for dealer partners.

Its exclusive partnership with Aston Barclay Group, leading to the creation of Aston Barclay Stock Funding, means dealers will be supported in sourcing and funding vehicles bought through a variety of physical and digital channels, including those receiving post-purchase reconditioning by Aston Barclay.

Digital technology means they will be able to do so in as little as three ‘clicks’.
V12 Vehicle Finance is also Secure Trust Bank’s move into the prime lending market.

David Mercer, managing director of the motor finance division, said in the UK some dealers may typically lose two in 20 prospective buyers because their proposal for finance is declined by a prime lender. V12 Vehicle Finance will enable them to capture all 20 because it will automatically propose near-prime rates.

Dealer partners will also be able to offer V12 Service Assist, a 0% APR finance product for consumers to fund repairs to their vehicle between £250 and £2,500.

“We are focused on building a unique proposition for used car and van dealers that has never been seen before in the UK market.

“Secure Trust Bank has built a strong heritage in the vehicle finance sector with Moneyway, and is keen to invest in new products to further grow the business," said Mercer, who had previously headed Cox Automotive's funding operation NextGear Capital before joining Secure Trust Bank in 2018.

The bank aims to treble its motor lending from the £276m of 2018 within five years.

hxxps://www.am-online.com/news/supplier-news/2019/06/04/secure-trust-bank-launches-stock-sale-and-repair-funding-service

[archy147] 17/5/2019 15:45

Any news on this one guys?

[topvest] 16/5/2019 21:12

It's certainly not a little cracker....but for a steady, well controlled bank...one to make steady progress year in year out this is a good investment. Hopefully!

[archy147] 16/5/2019 12:54

I take that as a no then lol

[archy147] 15/5/2019 22:00

Guys I’ve been looking around for a little cracker to invest in. This looks like a possibility, any views?

[retsius] 15/5/2019 16:44

Look at the closing buy trades: 100k,132k,132k and the price only goes up 15p!

Please explain?

[retsius] 15/5/2019 16:44

Look at the closing buy trades: 100k,132k,132k and the price only goes up 15p!

Please explain?

[rimau1] 15/5/2019 14:12

Excellent update, looks like STB is hitting a sweet spot

[spooky] 15/5/2019 14:04

Pretty positive update, trading ahead.