Secure Trust Bank PLC (LSE:STB) has issued a trading update for the financial year ending December 2025, outlining a major strategic move to wind down its Vehicle Finance business. The run-off decision is intended to strengthen long-term returns, with the bank expecting an improvement in Return on Average Equity over time.
Although the net lending book contracted by 4.1% in the third quarter, the bank’s Core business delivered robust growth of 10.3% year-on-year, supported by strong performance in its Retail Finance and Real Estate Finance segments. The withdrawal from Vehicle Finance has, however, resulted in higher-than-anticipated impairment charges and may require further provisions for onerous supplier contracts.
Secure Trust Bank now forecasts that its underlying profit before tax for FY25 will be up to £9 million below market expectations. Even so, the bank still anticipates approximately 30% year-on-year growth in underlying profit before tax.
Valuation metrics remain encouraging, with an attractive P/E ratio and dividend yield providing notable positives for investors. While technical indicators suggest a generally upward trend, short-term momentum is more mixed. The bank’s financial position appears stable overall, though profitability and cash flow challenges have been highlighted as areas requiring improvement.
About Secure Trust Bank
Secure Trust Bank is a long-established UK retail bank with more than 70 years of history, headquartered in Solihull, West Midlands. It operates through Real Estate Finance and Commercial Finance divisions under its Business Finance segment, and through its Retail Finance division on the consumer side. The bank is authorized by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.
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