Secure Trust Bank - Benign Q1 trading update

Secure Trust Bank (STB) announced in its Q120 trading update that new business lending rose 7.1% year-on-year and 2.4% quarter-on-quarter to £318.5m. Loan balances declined by 6.6% and 1.0% respectively, with lending still affected by the COVID pandemic lockdown. The loan balances of the Business Finance and Consumer Finance divisions were ‘static’, but the run-off of the closed Asset Finance and Consumer Mortgage books led to the 1% decline. Management viewed credit performance as ‘benign’. STB is seeing a phased return to pre-pandemic lending criteria in the Motor Finance division. We continue to forecast a 5% year-on-year increase in group loans by the end of FY21. Client deposits fell 8.2% year-on-year and 3.8% quarter-on-quarter in Q121, but STB said it was able to further reduce its cost of funding.