Businesses ‘yearning for stability’ says UK bank chief
Businesses are “yearning” for stability, according to a top banking chief executive, as the turmoil in the Middle East threatens to upend the global economy.
Ian Corfield, the boss of London-listed Secure Trust Bank, told Morning Wire: “I think the reality is that even before things kicked off a month ago, obviously nerves were increasing.
“We’ve seen it over the course of the last few years that consumers get nervous about what’s going on in the world and restrict their spending.”
It comes as firms across the country face a disruption from the chaos in the Middle East that has sent energy prices soaring as the cost of oil spiked.
On Friday morning, economists across the City were flagging recession warnings after January’s GDP print showed the UK economy failed to grow in the first month of the year – even before the Iran war broke out.
“Like all businesses, what we’re yearning for is stability, whether we’re going to get it is a different question,” Corfield said.
Secure Trust’s cost-cutting mission
The banking chief’s comments come as Secure Trust kicks off its 2026 overhaul strategy after Corfield took the helm at the firm in the summer of last year
Corfied said the bank was in “pretty good shape” to battle the uncertain environment, as he laid out his ambition to accelerate the lender’s cost-cutting regime.
Secure Trust has labelled the upcoming year as one of transition, in which it will fastrack its plans to remove £25m in costs by 2028, instead of 2030.
But Corfield is bracing for a slight uptick in costs through the strategy, with the implementation expenses now expected to reach £12m as opposed to the previous £5m. Meanwhile, the bank’s cost-to-income ratio – a crucial metric for profitability – is forecast to reach around 47 per cent, a jump from 2025’s 43.7 per cent.
“We’re essentially saying we’re going to take that action over the course of the next 18 months.
“But having taken that action, we should see our cost to income ratio being in line with market leaders,” he said.
Motor finance haunts banking industry
Secure Trust’s share price had soared over 150 per cent in the last year, with the bank managing to claw back from a staggering 20 per cent drop in October following news of the financial watchdog’s motor finance scheme.
The bank sold its remaining vehicle finance loan book to European Alternative Investment Fund Manager LCM Partners last year in a move expected to increase the bank’s CET1 ratio – a crucial metric of a bank’s financial strength – by 180 basis points and generate a net gain of £9m.
It comes after the firm set aside £21m in provisions for the forthcoming sector redress scheme, which is set to be released at the end of March.
Corfield said if the Financial Conduct Authority (FCA) does not “change a word” of the initial proposals put out for consultation last October, Secure Trust expects to hike their provisions by an additional £6m.
Across the industry lenders have pulled no punches in their criticism of the scheme, with the boss of Lloyds Bank – which owns the country’s largest car finance lender Black Horse – warning it could wipe two decades of profitability off the industry.
“Whilst it’s annoying, this is not existential,” Corfield said, but added the firm had been active in the feedback process to the bank’s current redress proposals.
The new strategy for Corfield rests return on average tangible equity – a measure a company’s profitability and efficiency – climbing to 16 per cent in the medium-term, up from the current 14.3 per cent.
Over the last year, pre-tax profit was broadly flat at the £59.3m mark, compared to £59.4m, the year prior.