3 July 2024
Secure Trust Bank
PLC
Capital Markets
Event - Deep dive on Real Estate Finance
Secure Trust Bank PLC ("Secure Trust Bank" or
the "Group"), a leading specialist lender, will host an investor
event today and will provide an update on its Real Estate Finance
business and how this business supports the Group in achieving its
medium-term financial targets as set out in its capital markets day
on 8 November 2023.
Real Estate
Finance: A tailored specialist property
lender
Over the last decade, Real Estate Finance has
achieved significant growth, maintained low levels of cost of risk
and delivered significant operational leverage by taking advantage
of its significant sector expertise.
Geoff Ray (Managing Director, Real Estate
Finance), John Griffin (Regional Head, London & South East) and
Chris King (Head of Credit) will provide details of their strong
track record and the strategic repositioning of the Real Estate
Finance business to focus on lower risk residential investment
loans, which represented 84% of the Real Estate Finance net lending
book at the end of 2023.
Growth track
record
Real Estate Finance is celebrating its
10th year and has grown net lending balances every year
since launch. Lending balances grew from £1,052 million in
2020 to £1,244 million at the end of 2023, representing 18% total
growth. The management team will provide details on the
reasons behind this success and the opportunities for further
growth, including the strategic evolution in the portfolio mix
towards residential investment loans and how their market expertise
and bespoke relationship driven approach is valued by
clients.
Specialist,
relationship-led lending
Real Estate Finance has adopted a 'through the
cycle' underwriting approach that its professional clients
appreciate. The power of the relationship model has seen new
lending to existing clients increase from 36% in 2021 to 71% in
2023, with reliance on new lending origination from brokers
declining from 42% to 7% over the same period. This retention
model has the benefit of reduced cost of customer acquisition and
greater knowledge of customers' risk profiles.
Improved
lending quality and low cost of risk
The business has maintained its credit
underwriting discipline while delivering strong growth. The
portfolio's loan to value has remained consistent since launch and
was 57% at the end of 2023. Cost of risk has averaged 16
basis points since 2014, despite the volatile macro-economic
backdrop for the real estate market and the rapid increase in the
Bank of England base rate more recently.
Cost
efficiency - Operational leverage
Costs have been tightly controlled while the
business has seen robust growth in the loan book. Year-end staff
numbers (full-time equivalents) decreased from 55 in 2019 to 49 in
2023, reflecting the operational leverage in the
business.
Geoff Ray,
Managing Director, Real Estate Finance, said:
"Secure Trust Bank's Real Estate Finance
business has a long-term track record of delivering growth in
tailored specialist property lending. The business has
increased its loan book by 18% in the last 3 years and we have an
ambition to drive a similar level of loan book growth in the medium
term.
The strategic repositioning of our business
towards the residential investment market has allowed us to deliver
attractive risk adjusted returns for the Group through capital
efficiency, given attractive pricing and lower risk weighted
assets."
David
McCreadie, Chief Executive Officer, said:
"Secure Trust Bank continues to deliver on its
strategic priorities across all our specialist lending businesses.
The information that will be provided at our Capital Markets Event
will provide insight into our Real Estate business and highlight
the capability of this team as they continue its growth
trajectory.
I remain confident in our ability to deliver
the Group's £4 billion loan book ambition that will unlock our
14-16% return on average equity target."
Capital Markets
Event details
A live webcast of the presentation and slides
will be available at the following link today at 2.00
p.m.:
https://brrmedia.news/STB_CMD_24
The Group will announce its interim results to
30 June 2024 on Wednesday, 14 August 2024.
Enquiries:
Secure Trust Bank PLC
David McCreadie, Chief Executive
Officer
Rachel Lawrence, Chief Financial
Officer
Phil Clark, Investor
Relations
Tel: 0121 693 9100
Investec Bank
plc (Joint Broker)
Bruce Garrow
David Anderson
Maria Gomez de Olea
Tel: +44 (0) 20 7597 5970
Shore Capital
Stockbrokers (Joint Broker)
Mark Percy / Sophie Collins (Corporate
Advisory)
Guy Wiehahn (Corporate Broking)
Tel: +44 (0)20 7408 4090
Camarco
Ed Gascoigne-Pees,
Geoffrey Pelham-Lane, Sean
Palmer
securetrustbank@camarco.co.uk
Tel: +44 (0)7591 760844
About Secure
Trust Bank:
Secure Trust Bank is an established,
well‐funded and capitalised UK
retail bank with over 70‐years
of trading history. Secure Trust Bank operates principally from its
head office in Solihull, West Midlands, and has
897 employees (full‐time equivalent) as at March 2024. The Group's
diversified lending portfolio currently focuses on two
sectors:
(i) Business
finance through its Real Estate Finance and Commercial Finance
divisions; and
(ii)
Consumer finance through its Vehicle Finance and Retail Finance
divisions.
Secure Trust Bank PLC is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation
Authority.
Secure Trust Bank PLC, Yorke House, Arleston
Way, Solihull, B90 4LH.