Secure Trust Bank (STB) H2 2025 & investor update earnings summary

Executive summary

• Achieved profit before tax of £59.3m, with operating income up 6.2% to £165.2m, driven by 8–8.1% net lending growth and a simplified business model post-Vehicle Finance exit.

• ROAE at 14.3% for 2025, in line with mid-teen ambitions, despite a slight decrease from the prior year.

• Strategic focus on product expansion, digital solutions, and capital discipline to drive targeted growth and higher returns.

• Project Fusion delivered £8m in annualised cost savings, supporting operational efficiency.

• Announced a 5% increase in dividend to 35.5p per share and initiated a £10m share buyback program, subject to regulatory approval.

Financial highlights

• Net lending balances grew 8.1% to £3.3bn; customer deposits rose 8.2% to £3.5bn year-over-year.

• Operating income up 6.2% to £165.2m, with NIM stable at 4.7% and cost-to-income ratio improved to 45.2%.

• Cost-to-income ratio improved by 120–220bps to 45.2%; excluding non-recurring costs, would have been 43.7%.

• Cost of risk increased to 1.0% (from 0.8%), with impairment charges rising to £31.4m, mainly due to specific cases.

• CET1 ratio at 12.9%, pro forma 14.7% post-Vehicle Finance sale.

Outlook and guidance

• Medium-term targets: >16% ROAE and ~10% annual net lending growth by FY 2028.

• 2026 guidance: net lending growth of 8–10%, CET1 ratio ~13.5%, cost-to-income ratio temporarily higher at ~47% due to strategic investments.

• Focus on sustainable growth, cost discipline, and enhanced shareholder returns, with a progressive dividend policy and £10m share buyback planned.