Secure Trust Bank - Momentum building in Q3

In its Q3 trading update, Secure Trust Bank (STB) disclosed that it is experiencing robust loan growth. New business lending is now above pre-pandemic levels. STB’s core lending book in Q321 rose 3.3% quarter-on-quarter and 7% year-on-year. Motor finance new business grew 15% in just three months. New business lending in the quarter was up 20% and 59% on the previous quarter and 12 months ago. Net loan balances were £2,404m in Q321, which is in line with our end-FY21 forecast of £2,400m. We therefore believe that if STB maintains this growth pace, its loan book is likely to come in 3–5% above our year-end forecasts. Although there was no formal statement on either asset quality or interest margins, management stated that the bank is trading in line with its guidance from the July update. STB will have a capital markets day for analysts and institutional investors on 3 November 2021.