15th Oct 2014 07:31
LONDON (Alliance News) - Secure Trust Bank PLC Wednesday said it expects full-year results to be at or above the upper end of market expectations, citing growth in lending balances coupled with lower-than-expected impairment levels, as well as "firm" control over operating costs.
Those sentiments were echoed by Arbuthnot Banking Group PLC, still the owner of 53.26% of Secure Trust after selling 1.0 million shares as part of a GBP75 million institutional placing of Secure Trust Bank shares in July. Arbuthnot said it expects its own full-year results to be marginally ahead of market expectations.
The lenders were updating the market on the three months ended September 30.
Secure Trust Bank said customer lending balances now exceed GBP500 million for the first time. It said third-quarter new lending volumes written during the third quarter are more than 87% higher than the same period last year. The lender was buoyed by demand for consumer lending, especially in cycle and motor finance, which was "healthy". New lending business volumes are "materially higher" than for the same quarter last year, Secure Trust said. Its retail finance division is also looking to build on the launch of its season-ticket finance offering.
Secure Trust said it has made "significant" progress in developing its plans for lending to small and medium-sized enterprises. It also noted that its real estate finance team has built up a "significant" pipeline of good quality new business opportunities.
"A number of these have been drawn down during the quarter," Secure Trust said. "The lending is mainly short term development financing with prudent loan to value levels. In light of the successes achieved so far, and the future potential, the bank has accelerated its recruitment plans to augment the existing credit risk and relationship management teams."
Secure Trust said that new business is already being written by the invoice finance division it launched on September 1. It said that interest in its entry to the market has "exceeded expectations", resulting in further new business opportunities. This means that the newly launched division has brought forward plans to recruit additional risk and business development staff.
"With the UK economy continuing to recover, inflation remaining subdued, employment levels rising and consumers and businesses feeling more confident Secure Trust Bank believes it is well positioned to sustain its positive progress over the coming period," Secure Trust said in a statement.
Meanwhile, Arbuthnot Banking Group said the investment made by Arbuthnot Latham in its private banking distribution continues to be rewarded.
"The bank has seen a good flow of new client introductions leading to attractive loan opportunities and further increases in funds under management," Arbuthnot said in a statement.
Its Dubai branch, which has celebrated its first anniversary, remains on track on to break even in 2015, Arbuthnot said.
It also said the sale of Gilliat Financial Solutions' assets, and its subsequent cessation of business were completed during the quarter and had "no material impact" on Arbuthnot Latham's profitability.
Arbuthnot said its capital base improved by 80% following the placing of Secure Trust shares in July. All of the new capital is available to support growth, the company added.
"Given the improving market conditions and the enlarged capital base, the group remains well positioned to maintain its positive progress," Arbuthnot said.
Arbuthnot shares were Tuesday quoted up 2.8% at 1,110.00 pence, while Secure Trust Bank shares were untraded at 2,420.00p.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Secure TrustArbuthnot