Secure Trust Bank (LSE:STB) delivered a stronger financial performance in the first half of 2026, with higher lending balances, improved profitability and a stronger capital position providing further evidence of progress under its strategy for targeted growth and increased returns.
Net lending balances grew 4.9% to £3.5 billion, while the bank maintained a stable risk-adjusted margin of 4.2%. Capital strength also improved, with the Common Equity Tier 1 ratio rising to 14.3%, supported in part by the group’s withdrawal from vehicle finance.
Adjusted profit before tax increased 9.4% to £31.3 million, while total profit before tax climbed 40.8%, reflecting stronger underlying profitability and lower losses associated with discontinued operations.
Cost Savings Support Improved Profitability
Secure Trust Bank delivered £5.5 million of cost savings during the first half and reached an annualised savings run rate of £15 million as management continued to focus on operating efficiency.
The group remains on track to meet its 2026 guidance, which includes a cost-income ratio of approximately 47% and a CET1 ratio of around 13.5%.
Its medium-term ambitions also remain unchanged. Secure Trust Bank is targeting annual lending growth of approximately 10% and a return on average equity above 16%, combining expansion in selected specialist lending markets with tighter cost and capital management.
Retail and Business Finance Operations Expand
Operational growth continued across several areas of the business. In retail finance, Secure Trust Bank established new partnerships with Magnet and Centrica British Gas while also onboarding 19 smaller retailers operating in the home improvement market.
The business finance division originated £40 million of bridging loans during the period and developed a speciality finance pipeline for the second half of the year.
The bank also expanded its funding capabilities by introducing a base rate tracker deposit product and establishing its first relationship with a deposit aggregator, broadening the channels available to attract customer deposits.
Digital Investment Targets More Efficient Growth
Secure Trust Bank continued to invest in digital capabilities, including the launch of a new application portal for bridging finance. The platform is intended to streamline the application process and support expansion in the bank’s specialist lending activities.
Customer adoption of its retail finance app also increased significantly, with the number of users rising to more than 660,000. Additional automation has been introduced within the savings business, allowing the bank to bring new products to market more quickly.
These investments are intended to improve customer engagement while reducing operational friction as lending volumes increase.
Share Buyback Reinforces Capital Discipline
The bank is also returning capital to shareholders through a £10 million share buyback programme, approximately half of which had been completed by the end of the period.
Combined with its progressive dividend policy, the buyback reflects management’s focus on balancing investment in growth with shareholder returns and maintaining appropriate capital levels.
Secure Trust Bank’s wider outlook nevertheless carries some financial uncertainty following volatile historical performance, including a move to a net loss in 2025 and inconsistent cash flow. Recent balance sheet improvements provide some counterbalance to these concerns.
Technical indicators are more supportive, with the shares displaying a clear upward trend and positive momentum. Valuation appears reasonable, although not sufficiently compelling on its own to eliminate the risks associated with previous financial volatility.
More About Secure Trust Bank
Secure Trust Bank is a UK specialist retail bank with a trading history spanning more than 72 years. Based principally in Solihull in the West Midlands, the group operates across Business Finance and Retail Finance, including through its V12 brand, supported by a diversified deposit franchise.
The bank concentrates on specialist lending segments where it believes it can generate attractive risk-adjusted returns. Its strategy is focused on targeted lending growth, higher profitability and disciplined use of capital while serving consumers and businesses across multiple financing categories.
Secure Trust Bank combines specialist lending with expanding digital capabilities, including savings and retail finance applications, alongside newer areas such as bridging and speciality finance. Partnerships with major home improvement and energy brands form part of its strategy to broaden distribution and drive efficient growth.
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