Secure Trust Bank mulls entering mortgage market

Increase in lending

SECURE TRUST BANK, which has its motor finance division based in Manchester, has seen its profit increase by a record 40% and its assets exceed £1bn for the first time.

Its interim results for the six months to June 30 reveal the challenger bank has traded strongly during the first half of the year.

And it says it is now considering entering the cash ISA market and the UK mortgage market.

The group achieved a record level of profit before tax for a first half period of £16m – compared to £11.4m in H1 2014 – while the positive momentum in customer lending continues, with balances up 90% in the last 12 months.

Operating income was £62.2m (H1 2014: £43.8m) while the bank’s loan book increased to £852.3m, a 90% increase on H1 2014’s £447.8m.

Customer deposits increased to £835.1m, a 75% increase on H1 2014’s £476.8m and total customer numbers increased to 486,805, a 24% increase on H1 2014’s 391,610.

The bank said its SME division is progressing as expected with average new lending exceeding £25m per month while the consumer finance division has achieved “excellent growth” driven by retail finance and motor finance.

Paul Lynam, Secure Trust Bank’s chief executive officer, said: “Today’s results show an ever growing number of customers being very satisfied with our products and services.

“As a result of the growth in our customer base we have been able to make a significant investment in the creation of an SME division whilst simultaneously achieving a record level of interim profit before tax.

“We have written record volumes of new loans to consumers and businesses and have not compromised our underwriting standards as reflected in impairment levels being below the levels priced for when the loans were originated.

“The performance and continued growth of our consumer finance portfolios and the strong traction achieved by the new SME division is encouraging.

“To support our future ambitions we are exploring the potential to broaden our deposit products by entering the cash ISA market and are considering the merits of possible entry into the UK mortgage market.

“We believe we have continued to position the bank to capitalise on the significant opportunities available to it, in a controlled and prudent manner, and we look forward to the future with confidence.”

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