Secure Trust Bank remains optimistic amid exit from motor finance
Secure Trust Bank PLC on Thursday published an optimistic trading update, as it anticipates a gain on the disposal of its motor finance unit.
The Solihull, England-based business and consumer lender said adjusted pretax profit is on track to meet guidance, currently amounting to £51.1 million and ‘representing an increase of over 30% year-on-year’, according to the bank.
Total net lending amounted to £3.69 billion at the year-end, up 0.4% on-quarter, and up 2.2% on-year. Deposits totalled £3.51 billion at December 31, 1.8% ahead of the previous quarter and 8.2% ahead of the previous year.
Its common equity tier one ratio was 12.9% at the end of December, up from 12.3% on-year, due to a 1.0% reduction in risk weighted assets, retained earnings for the year and the expected final dividend, which remains subject to approval.
‘The CET1 ratio includes a £21 million total provision for motor finance redress and costs based on the FCA consultation proposals and expected final outcomes,’ Secure Trust Bank noted.
Back in December, the lender said it was selling its Consumer Vehicle Finance branch to funds managed by LCM Partners for an estimated £458.6 million. Secure Trust Bank expects a £9.0 net gain on the sale.
It had shared its plan to exit motor finance last July, following the UK Financial Conduct Authority’s investigation into commission-related payments in the sector.
Secure Trust Bank expects to complete the divestment in the first quarter of 2026, which it sees ‘significantly’ bettering its capital ratios. Reflecting the sale, it estimated a pro-forma CET1 ratio of 14.7% at the end of December.
‘The group will remain responsible for administering, and retains liability for, payments due to customers under the motor finance redress scheme (when finalised) for any relevant loans in the sale portfolio that meet the criteria for redress,’ Secure Trust Bank noted.
It plans to report vehicle finance as a discontinued activity in its annual results, which are due March 12 with updated medium-term guidance.
Secure Trust Bank Chief Executive Ian Corfield commented: ‘I am delighted with our 2025 strategic progress, and the strong financial performance of the group. We have made the right decisions to reposition the group for growth and higher returns.’
The lender’s shares were up 4.5% to 1,520.00 pence on Thursday afternoon in London.
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