Secure Trust Bank Plc · LSE:STB
Secure Trust Bank — FY2013 Earnings Presentation
25 slides from Secure Trust Bank's earnings presentation, Mar 20, 2014
Slide 1: Secure Trust Bank PLC 2013 Year End Results
Secure Trust Bank PLC 2013 YEAR END RESULTS 20th March 2014
Slide 2: Introduction
Introduction PAUL LYNAM – Chief Executive Officer
Slide 3: Strategy – Continues to Deliver
Simple, straightforward banking Strategy – Continues to Deliver 1. Protect the reputation and sustainability of the bank via prudent balance sheet management, investment for growth and robust risk and operational control P 2. Maximise shareholder value by: a. b. Strong organic lending growth Promoti
Slide 4: 2013 Highlights
Simple, straightforward banking 2013 Highlights • Acquisition of the V12 Finance Group in January P • Acquisition of the trade and certain assets of Debt Managers Holdings Limited in January P • Distribution agreement with Sainsbury’s Bank to introduce new customers now live P • Direct to market Per
Slide 5: The Times – 11th March 2014
Simple, straightforward banking The Times – 11th March 2014 Invoice financing could offer cashflow boost for SMEs Small businesses are owed £291 billion used invoice financing, which in unpaid invoices and have been generally charged a much lower fee advised that they should use invoice than other l
Slide 6: Delivering Strong Performance
Simple, straightforward banking Delivering Strong Performance • Strong operating performance – Growth in loan book of 31% over the last year to £391m (2012 : £298m) – Operating income increased 68% to £79.0m (2012 : £47.0m) – Increase in year-on-year underlying profit before tax of 52% to £25.2m (20
Slide 7: Sustainable Positive Progress
Simple, straightforward banking Sustainable Positive Progress Lending assets £’m (excludes pre IPO acquired portfolios and OneBill) 2013 2012 £m £m Gross interest income 73.8 44.9 Growth on 2012 of 31% Funding costs (12.9) (8.6) Net interest Income 60.9 36.3 * 400 Excess funding costs pre acquisitio
Slide 8: Business Review
Business Review NEERAJ KAPUR – Chief Financial Officer 12 March 2013
Slide 9: Underlying Profit Bridge
Simple, straightforward banking Underlying Profit Bridge 52% increase on 2012 30 25 20 PBT (£m) 15 10 5 0 STB Reported Everyday Loans Group recharges STB Underlying Underlying STB Underlying Acquisition Everday Loans V12 Share option Group recharges STB Reported FY 2012 PBT consol. and other items F
Slide 10: Customer Loan Progression
Simple, straightforward banking Customer Loan Progression Growth on 2012 of 31% 400 350 300 250 £m 200 150 100 50 0 2008 2009 2010 2011 2012 2013 Unsecured Lending Motor Finance Retail Finance Acquired and Other Everyday Loans V12 SME PAGE 10
Slide 11: Income Bridge
Simple, straightforward banking Income Bridge (before cost of funds and impairment losses) + £35.8m 105.0 95.0 85.0 75.0 65.0 Income (£m) 55.0 45.0 35.0 25.0 15.0 FY 2012 Personal Everyday Motor Retail V12 Debt SME lending Current OneBill Other inc FY 2013 £60.7m lending Loans finance finance £4.5m
Slide 12: Income Analysis
Simple, straightforward banking Income Analysis Total income through lending and transactional channels is split as follows: 2013 2012 £3.8m £0.1m Personal lending £11.5m £1.0m £8.0m £0.5m Motor finance £8.9m £8.7m £4.8m Retail finance £4.5m Everyday Loans £3.9m £23.0m V12 £96.5m £60.7m Current acco
Slide 13: Balance sheet summary
Simple, straightforward banking Balance sheet summary £m Dec-13 Dec-12 Dec-11 Dec-10 Dec-09 Loans and advances to banks 110.0 155.3 139.5 68.2 50.3 Loans and advances to customers 391.0 297.6 154.6 89.5 51.4 Other assets 24.9 21.7 13.8 23.0 14.0 Total assets 525.9 474.6 307.8 180.7 115.8 Deposits fr
Slide 14: Deposit progression
Simple, straightforward banking Deposit progression Increase in average tenor of deposits – fixed term deposits now 44% of total deposits 450 400 350 44% 39% 300 250 26% £m 200 53% 150 63% 48% 82% 100 72% 50 28% 72% 28% 18% 11% 8% 8% 0 2008 2009 2010 2011 2012 2013 Sight Notice Term PAGE 14
Slide 15: 2014 outlook
Simple, straightforward banking 2014 outlook • 2014 has started as we expected: – Lending balances continue to grow with significant opportunities being targeted – Real benefits of V12 Group acquisition to be realised in 2014 – Halfords partnership already secured – A number of Premier League footba
Slide 16: Summary
Simple, straightforward banking Summary • In 2013 we continued to deliver on our stated and proven strategy • Strong operating and financial performance with growth in underlying profitability • Maintained our prudent approach to risk management • Successful identification and development of new len
Slide 17: Appendices
© Secure Trust Bank Simple, straightforward banking Appendices
Slide 18: Summary income statement
Simple, straightforward banking Summary income statement £m 2013 2012 Net interest income 60.9 34.4 Net fee, commission and other income 18.1 12.6 Operating Income 79.0 47.0 Impairment losses (15.6) (8.9) Operating expenses (40.3) (27.2) Gain on acquisition 0.4 9.8 Other operating expenses * (6.4) (
Slide 19: Customer Numbers
Simple, straightforward banking Fee Based Accounts • Current Account 35 Continued growth in customer numbers to 23k (December 2012: 21k) Customer Numbers (£k) – 30 – Dialogue with DWP re Universal Credit continues 25 20 15 • OneBill 10 5 – Continued decline in customer numbers in line with expectati
Slide 20: Operating Costs Bridge
Simple, straightforward banking Operating Costs Bridge + £15.9m 50 45 40 35 Cost (£m) 30 25 20 15 10 FY 2012 STB Staff costs Acquisition Non-recurring Provision for Everyday Loans V12 Costs Debt Managers Other Costs FY 2013 £30.8m £1.3m Costs costs option costs Costs £2.4m Costs £1.2m £46.7m £(0.5)m
Slide 21: Motor Finance
Simple, straightforward banking Motor Finance • The UK market for both new and used cars has seen double-digit growth • We have remained selective as to the source of proposals and together with robust underwriting criteria, continue to price for risk • Our position in this marketplace is to continu
Slide 22: Retail Finance (Including V12)
Simple, straightforward banking Retail Finance (Including V12) • The UK market for instalment credit has seen on-going growth, particularly on-line • Our portfolio of Retailers continues to increase whilst we explore not only new sectors, with Premier League football clubs and Railway season tickets
Slide 23: Personal Lending (Including Everyday Loans)
Simple, straightforward banking Personal Lending (Including Everyday Loans) • Many of our larger competitors have driven down pricing within the unsecured marketplace, seemingly to attract volume • We have avoided this approach, yet have seen good organic growth to date • New routes to market have b
Slide 24: Recent Acquisitions
Simple, straightforward banking Recent Acquisitions • New business volumes have increased and credit quality is improving • Investment in new offices in Belfast, Edinburgh and Ipswich in 2013, and Hull and Portsmouth in Q1 2014. More offices planned • Move into the guarantor lending space • Rational
Slide 25: Forward Looking Statements
Simple, straightforward banking Forward Looking Statements This document is a summary only of certain information contained in the announcement dated 20th March 2014 and should be read in conjunction with the full text of the announcement. This document contains forward looking statements with respe