Half Year 2024 Secure Trust Bank PLC Earnings Call Transcript
Key Points
- Secure Trust Bank PLC (LSE:STB) reported a 7.9% increase in operating income compared to the first half of 2023, demonstrating effective execution of their growth plan.
- The company achieved a 12.4% increase in profit before tax pre-impairments over the first half of 2023, driven by lending growth and disciplined cost management.
- Net lending grew by 3.2% to GBP3.4 billion, and customer deposits increased by 6% to GBP3 billion since the end of 2023.
- Secure Trust Bank PLC (LSE:STB) is on track to deliver GBP5 million of cost savings from Project Fusion by the end of the year, with an upgraded target of GBP8 million by the end of 2025.
- The company maintained a strong CET1 ratio of 12.7%, comfortably above the regulatory minimum, supporting their growth plans.
- The net interest margin (NIM) decreased slightly to 5.3% from 5.4% due to higher retail funding costs.
- The cost of risk increased by 20 basis points to 1.7%, primarily driven by a pause in collections activity in the vehicle finance business.
- Return on average equity reduced to 7.3% due to increased payment charges during the period.
- Impairments in the vehicle finance business rose by 23.2% due to the FCA's borrowers in financial difficulty review.
- Profit before tax decreased by 1.7% compared to the same period last year, reflecting challenges in certain business segments.
Good morning, and thank you for taking the time to join us for our 2024 interim results presentation. This slide explains the basis of reporting in the presentation, references made throughout to adjusted results which reflects continuing operations, excluding exceptional items as reported in our interim report for the six months ended June 30, 2024. A reconciliation of adjusted results to total results is included in the appendix of the presentation.
I will make some comments on our overall performance before Rachel covers off the financial results in more detail. I'll then talk about the performance of each business and the outlook for the rest of the year, and then we will take questions.
We have made further progress in the first half of the year. And we have been available to help and support our customers in what has been a challenging environment. We've been operating in a higher interest rate environment than we had expected in recent years as action was taken by the Monetary Policy Committee to
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