Secure Trust Bank shrugs off economic headwinds as it recovers from 2023
Secure Trust Bank has reported swelling loan and deposit books as the lender aims to reach £4bn in net lending and grow its profits after a challenging 2023.
The specialist bank said in a trading update on Thursday that its net lending came in at £3.37bn during the first three months of 2024.
This figure was up 1.7 per cent from the previous quarter and an 11.9 per cent jump from the same period last year.
Secure Trust cited “encouraging growth” of 3.8 per cent in its real estate finance business over the quarter, although it said a decline in its commercial finances balances reflected “the challenging market environment”.
Meanwhile, the bank’s balances in vehicle finance grew 1.6 per cent, while retail finance grew 1.4 per cent during the quarter.
The bank’s deposits stood at £2.92bn as of 31 March, also up 1.7 per cent from the previous three months. Secure Trust’s deposit book swelled 14.8 per cent from £2.54bn a year prior.
The bank, founded in 1952, posted record lending growth last year, but its pretax profit came in at £33.4m, down 24 per cent from £44.0m in 2022, due to one-off charges.
Chief executive David McCreadie said on Thursday that performance so far this year was “in line with management expectations”.
“I am pleased that the positive momentum from last year has continued and that we have taken another step towards our £4bn net lending ambition,” he added.
“We have seen improved lending quality in retail finance and continued to enhance our collections processes in vehicle finance. We have identified further opportunities to streamline our operations and generate additional cost efficiencies.
“With the UK economy returning to growth and the likelihood of interest rate reductions improving, we remain confident in delivering on our plans for the full year and our medium term targets.”
McCreadie told Morning Wire earlier this year that Secure Trust was not significantly exposed to the Financial Conduct Authority’s review into now-banned motor finance discretionary commission arrangements.