Secure Trust Bank Plc · LSE:STB
Secure Trust Bank — H1 2015 Earnings Presentation
26 slides from Secure Trust Bank's earnings presentation, Jul 21, 2015
Slide 1: Secure Trust Bank PLC 2015 Interim Results
Secure Trust Bank PLC 2015 INTERIM RESULTS 21st July 2015
Slide 2: Introduction & business review
Introduction & business review PAUL LYNAM Chief Executive Officer
Slide 3: Strategy continues to deliver
Strategy continues to deliver Maximise shareholder value: To maximise shareholder value through To protect the reputation, integrity and To ensure that the fair treatment of strong lending growth by delivering great sustainability of the Bank for all of our customers is central to corporate culture
Slide 4: H1 2015 Highlights: Significant growth
H1 2015 Highlights Significant growth Loan book up 90% to £852m (H1 2014:£448m) Customer deposits up 75% to £835m (H1 2014: £477m) Customer numbers up 24% to 486,805 (H1 2014: 391,610) Continued expansion into SME lending – Real Estate Finance commenced in H2 2013, Commercial Finance and Asset Finan
Slide 5: Continued growth in lending assets with increased diversity
Continued growth in lending assets with increased diversity Business Finance Consumer Finance 37% of lending 63% of lending assets (H1 2014 96%) assets (H1 2014 4%) Real Estate Finance, Debt Collection Personal Lending Motor Finance Retail Lending Asset & Commercial Finance and Other Prime credit po
Slide 6: H1 2015 Highlights: Positive returns
H1 2015 Highlights Positive returns Reported PBT up 40% to £16.0m (H1 2014: £11.4m) Underlying PBT up 14% to £17.4m (H1 2014: £15.2m) Underlying PBT, like for like, up 22% to £18.5m Interim dividend per share up 6% to 17p (H1 2014: 16p) Underlying return on equity 23.6% (H1 2014: 39.8% pre July 2014
Slide 7: H1 2015 Highlights: Strong capital and liquidity position
H1 2015 Highlights Strong capital and liquidity position Total capital ratio up to 15.3% (H1 2014: 13.6%) Loan to funding ratio at 88.5% (H1 2014: 80.5%) 7
Slide 8: Sustainable positive progress
Sustainable positive progress H1 2015 H1 2014 £m £m Gross interest income 64.2 41.6 Lending assets £m Funding costs (9.8) (7.2) Net interest income 54.4 34.4 Impairment losses (11.2) (6.4) GROWTH 90 ON H1 2014 OF Reported PBT 16.0 11.4 % 1000 Underlying PBT 17.4 15.2 900 800 Basic EPS (pence) 70.8 5
Slide 9: Financial review
Financial review NEERAJ KAPUR Chief Financial Officer
Slide 10: Summary income statement
Summary income statement Strong growth in earnings and dividend £m 2015 H1 2014 H1 % change 58% increase in Net interest income Net interest income 54.4 34.4 58% • Strong growth in Consumer lending and Net fee, commission and other income 7.8 9.4 -17% new SME lending businesses Operating Income 62.2
Slide 11: Profit bridge
Profit bridge Like for like business growth of £3.3m, an increase of 22% on H1 2014 20 15 £m 10 5 0 STB Subsidiary Group STB Like for like STB Like 2015 Senior STB ELL V12 Share Group STB Reported consolidation recharges Underlying business for Like H1 Mgmt Underlying consolidation amortisation opti
Slide 12: Income bridge
Income bridge* Increase on H1 2014 of £20.8m +£20.8m 80 75 70 65 £m 60 55 50 45 40 H1 2014 Current OneBill Other Motor Retail Personal Business H1 2015 £52.8m Account £(0.2)m £0.5m Finance Finance Lending Finance £73.6m £(0.1)m £3.2m £4.1m £4.5m £8.8m * Income before cost of funds, commission expens
Slide 13: Income analysis
Income analysis Total income through lending and transactional channels is analysed as follows: H1 2015 H1 2014 £3.4m £2.5m £3.6m £2.0m £2.3m £2.4m Personal Lending £9.2m £0.4m Motor Finance Retail Finance £8.2m £73.6m £73.6m £28.1m £52.8m £52.8m £23.6m Business Finance Current Account £12.3m OneBil
Slide 14: Balance sheet summary
Balance sheet summary Quality balance sheet assets £m H1 2015 H1 2014 Customer loans up 90% to £852.3m Cash and balances at central banks 100.4 1.3 Loans and advances to banks 21.2 41.9 Treasury Bills 7.0 59.2 Customer deposits up 75% to £835.1m Loans and advances to customers 852.3 447.8 Other asse
Slide 15: Customer loan progression
Customer loan progression Increase on H1 2014 of £404m, representing growth of 90% 1000 900 800 700 600 £m 500 400 300 200 100 0 Dec Jun Dec Jun Dec Jun 2012 2013 2013 2014 2014 2015 Personal Lending Motor Finance Retail Finance Business Finance DMS and Other 15
Slide 16: Lending bridge
Lending bridge Increase on H1 2014 of £405m +£405m 900 800 700 600 500 £m 400 300 200 100 0 H1 2014 DMS and Personal Motor Retail Invoice Asset Real Estate H1 2015 £447.8m Other Lending Finance Finance Finance Finance Finance £852.3m £(0.4)m £19.4m £24.5m £61.1m £15.7m £30.4m £253.8m 16
Slide 17: Deposit progression
Deposit progression Increase on H1 2014 of £358m, weighted towards Term deposits 900 800 700 600 56.6% 500 £m 54.4% 400 44.3% 44.3% 45.4% 300 39.0% 200 38.7% 52.9% 47.4% 47.4% 46.7% 39.4% 100 8.1% 8.3% 8.3% 7.9% 6.2% 4.7% 0 Dec Jun Dec Jun Dec Jun 2012 2013 2013 2014 2014 2015 Sight Notice Term 17
Slide 18: Capital
Capital Robust capital and modest leverage ratios maintained Capital remains healthy following 20% July 2014 placing with total capital Total 13.6% Total 15.3% ratio of 15.3% 15% Leverage ratio of 11.9% 10% (H1 2014: 10.4%) well above PRA minimum of 4% 5% 0% H1 2014 H1 2015 Pillar 1 requirement Pill
Slide 19: 2015 Outlook
2015 Outlook Continued growth and diversification Lending balances continue to grow with significant Continued expansion into SME lending activities opportunities being targeted • Motor Finance lending growth of 19% y/y Continue to work on a diverse pipeline of business • Retail Finance lending grow
Slide 20: Summary
Summary We continued to deliver on our stated and Entered Invoice Discounting and Factoring proven strategy markets in September 2014 Continuing strong operating and financial Asset Finance launched in Q4 2014, £30.4m performance with growth in underlying lent to SMEs since launch profitability The
Slide 21: Appendices
W SecureTrust ‘Simple and Straightforward Savings Hassle fee Savings and Fixed Bonds
Slide 22: Consumer finance
250 200 150 100 50 0 Consumer finance H1 FY H1 FY H1 2013 2013 2014 2014 2015 600 500 Consumer Finance FY2013 FY2014 H1 2014 H1 2015 400 Revenue 79.3 95.0 44.1 56.2 £m 300 200 Impairments (15.6) (15.3) (6.4) (10.8) 100 Net loans 388.3 475.6 431.6 536.5 0 H1 FY H1 FY H1 2013 2013 2014 2014 2015 Net l
Slide 23: Consumer finance
Consumer finance Business overview – Personal Lending Business overview – Motor Fixed rate, fixed term unsecured personal loans, with a Customers typically from C1, C2 and D socio-economic 12-60 months duration groups, focused on the used car market Advances from £500 to £15,000 New Prime lending pr
Slide 24: Business finance
100 50 0 H1 FY H1 FY H1 Business finance 2013 2013 2014 2014 2015 350 300 250 Business Finance FY2013 FY2014 H1 2014 H1 2015 200 Revenue 0.1 2.6 0.4 9.2 £m 150 100 Impairments - - - (0.3) 50 Net loans 1.8 143.3 12.5 312.4 0 H1 FY H1 FY H1 2013 2013 2014 2014 2015 Net lending balances 24
Slide 25: Business finance
Business finance Business overview – Real Estate Finance Business overview – Asset Finance Commenced operation in H2 2013 Launched in Q4 2014 Five main products available; residential development, Hire purchase and finance lease arrangements commercial development, residential investment, commercial
Slide 26: Forward looking statements
Forward looking statements This document is a summary only of certain information contained in the announcement dated 21st July 2015 and should be read in conjunction with the full text of the announcement. This document contains forward looking statements with these forward looking statements as a