21st Jul 2015 07:48
LONDON (Alliance News) - Secure Trust Bank PLC Tuesday said it is weighing the merits of providing cash individual savings accounts and mortgages in the UK.
The news came as Secure Trust Bank said that pretax profit increased to GBP16.0 million in the six months ended June 30, compared with GBP11.4 million in the corresponding period of the prior year. Secure Trust Bank raised its dividend by one pence to 17p per share.
Separately, Arbuthnot Banking Group PLC, which owns private banking company Arbuthnot Latham & Co and 51.9% of Secure Trust Bank, said its pretax profit rose to GBP15.7 million in the first six months of 2015, compared with GBP9.5 million in the corresponding period the prior year.
On top of Secure Trust Bank's performance, Arbuthnot was helped by a "substantial increase" in accounts opened by new private banking clients at Latham & Co due to the bank hiring more private bankers in the past two years. Arbuthnot raised its interim dividend by one pence to 12p per share.
Secure Trust Bank Chief Executive Paul Lynam, who is aiming to shift most of its balance sheet lending into secured lending assets, while growing its unsecured consumer finance portfolio under a strategy of diversification, said he has hired a team to help the bank decide if a "sustainably viable proposition" can be built in the UK mortgage market alongside some of the other challenger banks.
In coming to a decision, the bank also will consider the UK government's move earlier this month to to restrict the tax relief offered to buy-to-let landlords.
Secure Trust Bank, which doesn't currently offer Cash ISAs, think the market has become more important due to changes to personal taxation, prompting it to progress plans to offer the products.
"This will help to diversify our funding sources and potentially reduce these costs noting the rates offered on Cash ISA products are typically 25% lower than on non-ISA products," Lynam said.
Secure Trust Bank shares were up 0.5% at 2,900.00 pence on Tuesday morning, and Arbuthnot shares were up 8.9% at 1,494.15.
By Samuel Agini; [email protected]; @samuelagini
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