Secure Trust Bank (STB) H1 2025 earnings summary

Executive summary

• Adjusted profit before tax rose 36.3% to £23.3m, driven by strong lending and deposit growth, cost discipline, and improved returns.

• Strategic pivot away from Vehicle Finance to focus on higher-returning core businesses, with new lending ceased and book in run-off.

• Project Fusion cost optimisation on track for £8m annualised savings by end-2025.

• Interim dividend increased to 11.8p per share, reflecting a progressive policy.

• CEO transition underway, with Ian Corfield to succeed David McCreadie.

Financial highlights

• Net interest income increased 12.2% to £99.0m; operating income up 10.6% to £106.3m.

• Net lending grew 6.1% to £3.8bn; deposits up 8.2% to £3.5bn.

• Adjusted cost-income ratio improved to 49.1%, down 460bps year-over-year; cost growth limited to 1.2%.

• Net interest margin increased to 5.4% (up 0.1pp year-over-year).

• Tangible book value per share up 3.9% to £19.37; shareholders' equity up 3.8%.

Outlook and guidance

• On track to achieve £4bn net lending target in the near term.

• Targeting cost-income ratio of 44%-46% and return on average equity of 14%-16% in the medium term.

• Further cost reductions of £25m expected by 2030, with 65% by 2027, mainly from Vehicle Finance run-off.

• Details of refreshed strategic plan and new medium-term ambitions to be announced at Q4 2025 capital markets event.

• Interest rates expected to remain stable in 2025, with cuts anticipated in 2026.