Full Year 2024 Secure Trust Bank PLC Earnings Call Transcript
Key Points
- Secure Trust Bank PLC (LSE:STB) delivered strong growth in net lending, increasing by 8.8% to GBP3.6 billion.
- The company achieved significant operational efficiencies, with a 3.1 percentage point reduction in the cost-income ratio to 50.9%.
- Retail finance saw a 40-basis point improvement in net interest margin (NIM) year on year to 6.8%, contributing to overall margin stability.
- The company implemented a new progressive dividend policy, resulting in a total dividend increase of 5% for the year.
- Secure Trust Bank PLC (LSE:STB) has a clear pathway to achieving its GBP4 billion net loan book target, supporting a 14% to 16% return on average equity.
- The vehicle finance division faced significant challenges, with a cost of risk increasing from 3.4% to 7.6% due to regulatory impacts.
- Statutory profit before tax was impacted by exceptional items, including GBP6.9 million for potential redress and costs for motor finance commission.
- The company's adjusted profit before tax decreased by 8.2% year on year to GBP39.1 million.
- Commercial finance contracted by 7.9% due to a subdued market for new business and economic climate attrition.
- There is ongoing legal and regulatory uncertainty regarding historic commissions in the motor finance industry, which could materially impact financial outcomes.
Hello and thank you for taking the time to join us for our 2024 full-year results presentation. Before I start, I'll let you read this slide to explain the basis of reporting the presentation. References made throughout to adjusted results which reflects continuing operations excluding exceptional items as reported in our annual report and accounts for the year ended December 31, 2024. A reconciliation of adjusted results to total results is included in the appendix.
And having listened to feedback from shareholders, we've also included business unit segmental reporting for the first time. I will provide an overview on 2024 and comment on our growth potential, some key metrics, and share the progress made last year and over recent years in moving towards our medium term targets.
Rachel will then cover the financial performance in more detail before I comment on the progress made against her optimizing for growth, strategic priorities, and the outlook for 2025. We have delivered strong growth in net
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