Slide 1: Secure Trust Bank PLC 2014 Half Year Results
Secure Trust Bank PLC 2014 HALF YEAR RESULTS 22nd July 2014
Slide 2: Introduction
Introduction PAUL LYNAM – Chief Executive Officer
Slide 3: Strategy – Continues to Deliver
Simple, straightforward banking Strategy – Continues to Deliver • Protect the reputation and sustainability of the bank via prudent balance sheet management, investment for growth and robust risk and operational control P • Maximise shareholder value by: - Strong organic lending growth - Promotion o
Slide 4: Update on Placing
Simple, straightforward banking Update on Placing Transaction Summary • On 19 June, the Company announced that it had carried out a placing of 2,083,333 new Ordinary Shares raising gross proceeds of £50m and the sales of 1,041,667 Ordinary Shares, raising gross proceeds for parent company Arbuthnot
Slide 5: H1 2014 Highlights
Simple, straightforward banking H1 2014 Highlights STB continues to deliver on its sustainable growth strategy and with significant investment in expanding the management team to support future growth Growth on H1 2013 Security maintained • Loan Book 22% to £448m (H1 2013: £366m) • CET1 ratio remain
Slide 6: UK market offers continuing material growth potential
Simple, straightforward banking UK market offers continuing material growth potential SME • £33bn market(3) • Lending static, large banks’ capital constrained STB Loan Book • Relationship and service driven £bn H1 2014 Market size* Implied share • Team being built, with Paul Marston joining on STB E
Slide 7: Delivering Strong Performance
Simple, straightforward banking Delivering Strong Performance • Strong operating performance – Growth in loan book of 22% over the last year to £448m (H1 2013 : £366m) – Operating income increased 21% to £43.8m (H1 2013 : £36.3m) – Increase in year-on-year underlying profit before tax of 48% to £15.
Slide 8: Sustainable Positive Progress
Simple, straightforward banking Sustainable Positive Progress 2014 H1 2013 H1 Loans and advances to customers £m £m £m Gross interest income 41.6 34.1 Growth on H1 2013 of 22% Funding costs (7.2) (6.6) Net Interest Income 34.4 27.5 500 Impairment losses (6.4) (7.6) 400 Reported PBT 11.4 6.2 300 £m U
Slide 9: Business Review
Business Review NEERAJ KAPUR – Chief Financial Officer 12 March 2013
Slide 10: Summary Income Statement
Simple, straightforward banking Summary Income Statement £m H1 2013 H1 2014 FY 2011 FY 2012 FY 2013 Net interest income 27.5 34.4 17.2 34.4 60.9 Net fee and commission income 8.8 9.4 11.2 12.6 18.1 Operating income 36.3 43.8 28.5 47.0 79.0 Impairment losses (7.6) (6.4) (4.6) (8.9) (15.6) Operating e
Slide 11: Balance Sheet Summary
Simple, straightforward banking Balance Sheet Summary £m H1 2013 H1 2014 FY 2011 FY 2012 FY 2013 Loans and advances to banks 69.1 102.4 139.5 155.3 110.0 Loans and advances to customers 365.8 447.8 154.6 297.6 391.0 Other assets 29.5 19.2 13.7 21.6 24.9 Total assets 464.4 569.4 307.8 474.6 525.9 Dep
Slide 12: Underlying Profit Bridge
Simple, straightforward banking Underlying Profit Bridge 48% increase on H1 2013 16 14 12 10 PBT (£m) 8 6 4 2 0 STB Reported Subsidiary Share Option STB Underlying Underlying STB Underlying Acquisition Everday Loans V12 Share option Group recharges STB Reported H1 2013 PBT consol. Scheme and H1 2013
Slide 13: Income Bridge
Simple, straightforward banking Income Bridge (before cost of funds and impairment losses) + £7.6m 54.0 52.0 50.0 48.0 46.0 Income (£m) 44.0 42.0 40.0 38.0 36.0 H1 2013 Personal Motor finance Retail finance Everyday V12 Real Estate Current OneBill DMS and H1 2014 £45.2m lending £2.6m £0.3m Loans £1.
Slide 14: Income Analysis
Simple, straightforward banking Income Analysis Total income through lending and transactional channels is split as follows: H1 2014 H1 2013 Personal lending £0.4m £1.9m£5.7m Motor finance £3.6m £2.4m £5.3m £2.4m £4.0m Retail finance £2.3m £3.5m Everyday Loans £12.6m £2.2m £10.0m £52.8m V12 £45.2m C
Slide 15: Operating Costs Bridge
Simple, straightforward banking Operating Costs Bridge + £3.5m 26 25 24 23 Cost (£m) 22 21 20 19 18 H1 2013 STB Staff costs Provision for ELL Costs V12 Costs DMS Costs Retail Finance Invoice Finance Other Costs H1 2014 £22.5m £0.8m option costs £1.1m £0.4m £0.1m £0.3m £0.5m £0.6m £26.0m (£0.3)m PAGE
Slide 16: Customer Loan Progression
Simple, straightforward banking Customer Loan Progression Growth on H1 2013 of 22% 450 400 350 300 £m 250 200 150 100 50 0 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Unsecured Lending Motor Finance Retail Finance DMS and Other Everyday Loans V12 SME PAGE 16
Slide 17: Deposit Progression
Simple, straightforward banking Deposit Progression Increase in average tenor of deposits – fixed term deposits now 45% of total deposits 500 450 400 45% 350 39% 44% 38% 300 £m 250 31% 26% 200 150 47% 53% 53% 48% 63% 57% 100 50 11% 12% 8% 9% 8% 8% 0 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Sight No
Slide 18: 2014 Outlook
Simple, straightforward banking 2014 Outlook Build on strong start in H1 2014 and exploit growth opportunities • Lending balances continue to grow with significant opportunities being targeted – Motor lending growth of 22% y/y, Retail finance lending growth of 24% y/y • Further benefits of V12 Group
Slide 19: Summary
Simple, straightforward banking Summary • We have continued to deliver on our stated and proven strategy • Continuing strong operating and financial performance with growth in underlying profitability • Maintained our prudent approach to risk management • Entry into core Invoice Discounting and Fact
Slide 20: Appendices
© Secure Trust Bank Simple, straightforward banking Appendices
Slide 21: Motor Finance
Simple, straightforward banking Motor Finance Business overview 7,000 UK: gross lending – Motor Industry(1) • Grown from standing start in 2009 – 22% y/y growth in H1 6,000 2014 • UK Market Size £m 5,000 Customers typically from C1, C2 and D socio-economic groups 4,000 • Focused on used car market 3
Slide 22: Retail Finance
Simple, straightforward banking Retail Finance Business overview UK: gross lending - retail finance / POS(1) • Targeting Prime Credit Portfolio Customers typically from 8,000 socio-economic groups A, B and C1 7,000 • Active across a range of retail markets, with a particular 6,000 UK Market Size £m
Slide 23: Personal Lending
Simple, straightforward banking Personal Lending Business overview - Direct Business overview – Everyday Loans • Fixed rate, fixed term, unsecured personal loans • Everyday Loans operates through 31 offices where loans are originated, serviced and collected • 12 to 60 months duration • Any purpose u
Slide 24: Forward Looking Statements
Simple, straightforward banking Forward Looking Statements This document is a summary only of certain information contained in the announcement dated 22nd July 2014 and should be read in conjunction with the full text of the announcement. This document contains forward looking statements with respec