Balances top £500m as Secure Trust Bank looks to sustain growth with new jobs

CUSTOMER balances at Solihull-based Secure Trust Bank have topped £500m for the first time, the bank has announced.

The bank said the balances were due to strong trading during the third quarter and it is predicting full year results at or above the upper end of market expectations.

In order to sustain growth the bank said it was also accelerating its recruitment drive and was now looking to create a number of new jobs.

In a trading update, the bank said it continued to enjoy the favourable conditions in the retail deposits market. It has raised additional two, four and seven year fixed rate deposits which enable it to match broadly the new lending activities and to mitigate the potential impact of interest rates rising faster than the market expects.

Demand for consumer lending, especially in Cycle and Motor Finance, remained healthy and overall new lending business volumes were said to be materially higher than for the same period in 2013.

The period also saw the bank’s retail finance division successfully launch its Season Ticket finance offering, a service it will look to build on during 2015.
 
The company said it had also made “significant progress” developing its plans for SME lending.

The Real Estate Finance team is said to have built up a significant pipeline of good quality new business opportunities. A number of these have been drawn down during the quarter.

The lending is mainly short term development financing with prudent loan to value levels. In light of the successes achieved so far, and the future potential, the bank said it had accelerated its recruitment plans to augment the existing credit risk and relationship management teams.

Secure Trust Bank Commercial Services, the invoice finance division of the bank, was launched during the quarter after a year in development.

The bank said new business was already being written and interest in its entry to the market had exceeded expectations, resulting in further new business opportunities.

“As a result Secure Trust Bank Commercial Services has brought forward its recruitment plans for additional risk and business development staff and is pleased to note that it is attracting high calibre recruits,” it said.

Total new lending volumes written during Q3 2014 are over 87% higher than in the same period last year. The loan book has performed in line with the trends reported in the first six months of 2014. Impairment levels remain below the level expected when the loans were originated.  
 
It said it was also continuing to work on a range of organic and external business opportunities.

“As a result of the growth in lending balances coupled with continuing lower levels of impairments and firm operational cost control Secure Trust Bank anticipates full year results to be at or above the upper end of market expectations,” it added.

“With the UK economy continuing to recover, inflation remaining subdued, employment levels rising and consumers and businesses feeling more confident Secure Trust Bank believes it is well positioned to sustain its positive progress over the coming period.”