7th Aug 2019 10:53
(Alliance News) - Secure Trust Bank PLC on Wednesday reported a sharp rise in interim profit, following strong growth in its loan book.
The retail and commercial bank recorded pretax profit of GBP18.1 million in the first six months of 2019, 20% higher than the GBP15.1 million reported a year before.
Net interest income increased 11% to GBP70.5 million from GBP63.7 million a year before. The lender's operating income increased 12% to GBP81.4 million.
Secure Trust Bank's total loan book ended June at GBP2.28 billion, 12% ahead of the GBP2.03 billion reported at the end of 2018 and 24% higher than the GBP1.84 billion recorded in June 2018.
The total number of customers jumped 27% to 1.4 million from 1.1 million a year before. As a result, customer deposits were 21% year on year at GBP2.00 billion.
"The group's diversified business model has allowed capital to be allocated to attractive market segments where customer demand has been higher than anticipated. There has been continued growth in both Business Finance and Consumer Finance, resulting in increased earnings and continued improvement in the quality of the loan book," the bank said.
Secure Trust Bank upped its interim dividend by 5.3% to 20 pence from 19p the year before.
The lender's CET1 ratio ended the half at 12.8%, edged down from 13.8% at the same point last year.
"The year-on-year movement is a function of the change in our balance sheet composition with the addition of Tier 2 capital and investment of capital to support the strong growth in the loan portfolios. When considering our capital ratios it is important to note that as at June 30 the residual contractual average life of the group's assets was just 1.9 years. On a behavioural basis the duration would be even shorter. This balance sheet structuring provides major advantages, one of which is the group's ability to react rapidly and efficiently to sudden changes in market conditions," STB explained.
Chief Executive Paul Lynam said: "The positive financial results for the first half of 2019 bode well for the remainder of the year, assuming an orderly Brexit. The group has delivered on a number of strategic objectives, with the launch of our Cash ISA product and completion of the first phase of our motor transformation plan. Our capital and liquidity positions remain healthy and have enabled us to take advantage of market opportunities in the first half of the year whilst retaining flexibility to manage economic uncertainty."
Lynam continued: "It is pleasing to report the positive momentum and strong profit growth during the period. We expect further progress during the second half of the year but need to be mindful that our own and other external forward looking economic indicators are pointing to a period of low business confidence and tepid economic growth. We are not detecting any discernible change in consumer behaviour but will remain vigilant as the rescheduled Brexit date approaches."
Shares in Secure Trust Bank were 2.2% higher in London on Wednesday at 1,370.00 pence each.
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