Secure Trust Bank - New tech and lower impairments

Secure Trust Bank (STB) announced that it has acquired AppToPay for an undisclosed ‘small amount’ and plans to use AppToPay’s proprietary technology platform to develop and grow its digital Buy Now Pay Later (BNPL) business. STB has also disclosed that its FY21 loan impairments will be ‘materially below’ analyst consensus of £12.9m (Edison: £12.7m). This is welcome news, although most investor attention regarding impairments has moved to focus on FY22. We are adjusting our FY21e EPS by 7% to 226.5p due to our now reduced £7.9m impairment estimate. All our other assumptions are unchanged, as detailed in our August 2021 update note, Good news as flagged. Our fair value remains 2,234p.