Secure Trust Bank (STB) Q3 2024 TU earnings summary

Executive summary

• Net loan book grew 0.5% in Q3 and 7.1% year-over-year, progressing toward the £4bn target.

• Project Fusion cost savings on track: £5m by year-end, with an additional £3m expected in 2025.

• Underlying, continuing profit before tax for FY24 expected to fall £10m–£15m below market expectations due to Vehicle Finance performance.

• Vehicle Finance collections normalized, with early arrears at a three-year low.

Financial highlights

• Net lending reached £3,439.2m in Q3, up 0.5% sequentially and 7.1% year-over-year.

• Customer deposits rose 3.2% in the quarter and 15.6% year-over-year to £3,141.4m.

• New business lending in Q3 totaled £577m, the highest for the year and in line with Q3 2023.

• Early repayments of TFSME funding totaled £105m by Q3, with an additional £15m repaid in October.

Outlook and guidance

• Value recovery from excess defaulted Vehicle Finance balances is taking longer than expected, with some recovery likely extending into 2025.

• Board expects FY24 profit before tax to be materially below market expectations, mainly due to Vehicle Finance.

• Continued growth opportunities anticipated despite near-term Vehicle Finance impacts.