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Secure Trust Bank PLC on Thursday expressed confidence in delivering on its medium-term targets as net interest income rose and it upped its total dividend. The Solihull, England-based retail bank said pretax profit fell 13% to £29.2 million in 2024 from £33.4 million the prior year, despite net interest income increasing 10% to £184.9 million from £167.5 million. Its shares were up 24% at 519.70 pence on Thursday afternoon in London. The reduction in profitability can be attributed to a widening of net impairment charge on loans and advances to customers to £61.9 million from £43.2 million. The bank said the impairment figure was significantly impacted by the pause in its collection processes in Vehicle Finance during the second half of 2023 following the Financial Conduct Authority’s Borrowers in Financial Difficulty review. It noted that delayed repossession activities created operational challenges in the first half of 2024, resulting in ‘an elevated stock of defaulted loans’. On an adjusted basis, before impairments, pretax profit rose 18% to £100.9 million from £85.5 million. Secure Trust Bank reported a stable net interest margin of 5.4%, flat with the prior year. Net lending balances grew 8.8% to £3.61 billion from £3.32 billion and customer deposits rose 13% to a record level of £3.23 billion from £2.87 billion. The bank proposed a final dividend of 22.5p per share, bringing the total dividend to 33.8p. This represents a 5.0% uplift from 32.2p the prior year. Secure Trust Bank expects that by the end of 2025 it will be ‘well positioned to have largely delivered against [its] £4 billion net lending target’. In the medium term, the bank is also targeting a net interest margin of greater than 5.5%, as well as a CET1 ratio of above 12.0%. For 2024, Secure Trust Bank reported a CET1 ratio of 12.3%, down from 12.7% in 2023. However, the firm did also note that significant legal and regulatory uncertainty remains across the motor finance sector and the wider macroeconomic environment. Chief Executive David McCreadie said: ‘Secure Trust Bank has remained focused on its medium-term targets and strategic priorities, delivering on balance sheet growth, stabilising net interest margin, and delivering cost efficiencies. ‘The business has delivered an 18% increase in its adjusted profit before tax pre impairments. We have continued to grow our loan book towards our £4 billion target... We remain confident in achieving our medium-term targets which we will have largely delivered by the end of 2025.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
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