Secure Trust bolsters lending as it ‘monitors’ global turbulence
Specialist lender Secure Trust Bank delivered an upbeat first-quarter trading statement on Thursday with growth across lending and deposits.
The London-listed lender posted a 3.2 per cent quarterly increase in its net lending to £3.7bn. This was up 10.5 per cent from the first quarter of 2024.
The firm said its business finance and consumer finance arms’ lending balances grew 4.9 per cent and 1.8 per cent respectively, putting the group on track for its target of £4bn net lending.
Meanwhile , deposits rose 3.9 per cent from the final quarter of 2024 to £3.4bn – a 15 per cent jump for the year.
The bank also said it completed the £25.8m sale of its defaulted vehicle finance loan balances in early April.
The loans are tied to the Financial Conduct Authority’s (FCA) ‘Borrowers in Financial Difficulty’ review.
Secure Trust said the review had “secondary impacts” and the transaction would allow it to deploy resources “more effectively to manage early-stage arrears and defaults.”
The bank’s vehicle finance arm has been caught in the motor finance scandal haunting the banking industry.
In November, Secure Trust slashed its profit expectations due to the performance of its motor finance business whilst early arrears in vehicle finance were at the lowest level for three years.
The Supreme Court is expected to make a ruling on the motor finance case in the summer, with the FCA set to follow with an industry-wide redress scheme if the lender’s are handed an adverse judgement.
Secure Trust eye ‘impacts’ of geopolitical landscape
The bank’s chief executive David McCreadie noted the group was “monitoring for potential impacts of the current turbulence in global markets and across the geopolitical landscape”.
This FTSE 100 banking giants upping their bad loan provisions on the back of increased geopolitical tensions in their first quarter reports earlier this month.
In the trading update, Secure Trust said it had paid back 74 per cent of Team Funding Scheme for Small and Medium-sized enterprises (TFSME) – a Bank of England initiative introduced in March 202 to support lenders during the pandemic.
The group said it paid £98m in TFSME in the first three months of the year, with an additional £30m after the quarter had ended.
McCreadie said: “I am pleased that we have completed the first key initiative that significantly reduces the excess stock of defaulted loans in Vehicle Finance.
“We also completed the implementation of our new operating model and are on track to deliver the previously announced £8m of annualised cost savings from Project Fusion by the end of this year. We are looking ahead with confidence.”