Secure Trust Bank (LON:STB) used an investor presentation and Q&A session to walk through its 2025 results on a continuing-operations basis, outline a refreshed strategy following its exit from Vehicle Finance, and set revised medium-term targets focused on returns and growth. Chief Executive Officer Ian Corfield, who joined mid-2025, said the group is now “materially simplified” and positioned to pursue targeted growth in two lending divisions—Retail Finance and Business Finance—supported by a deposits franchise.
2025 results: stable margin, improving efficiency, modestly higher impairments
Chief Financial Officer Rachel Lawrence reported return on average equity (ROAE) of 14.3% in 2025 versus 15% in 2024. Profit before tax (PBT) for continuing operations was GBP 59.3 million, essentially flat year-over-year, which she said reflected some non-recurring operating expenses and a small increase in impairment charges.
Secure Trust delivered a 120 basis point improvement in its cost-to-income ratio to 45.2% from 46.4%, as operating income grew faster than expenses. Operating expenses increased 3.5%, which Lawrence attributed entirely to non-recurring costs linked to changes in the senior leadership team. Excluding those, the cost-to-income ratio would have been 43.7%, according to the CFO.
Cost of risk increased to 1.0% from 0.8%, with impairment charges rising by GBP 8.2 million to GBP 31.4 million. Lawrence said Retail Finance impairment charges “normalized” after one-off model benefits in 2024, while Business Finance saw a small increase in cases. She also noted an increase in provisions driven by new business written and management overlays.
The bank proposed a full-year dividend of 35.5 pence per share, up 5% year-over-year, in line with its progressive dividend approach.
Vehicle Finance exit, redress provision, and capital position
Management emphasized that 2025 included decisive actions to exit Vehicle Finance. Lawrence said the sale of the consumer Vehicle Finance business completed on February 25, and that the consideration received was GBP 458.6 million, resulting in an approximately GBP 9 million net gain to be recognized in 2026 results.
On motor finance commission redress, Lawrence said the FCA published a consultation paper in October 2025 outlining a proposed redress scheme and that the bank expects an update by the end of March. In anticipation, Secure Trust recognized an additional provision of GBP 16.4 million in 2025 to cover potential customer redress and associated costs, based on probability-weighted scenarios. Lawrence added that if the scheme were implemented exactly as originally proposed, it would cost a further GBP 6 million. Following the sale of the consumer Vehicle Finance business, the bank will retain responsibility for any redress payments due for the relevant loans once criteria are finalized.
The capital picture strengthened during 2025. Lawrence reported the CET1 ratio rose 60 basis points to 12.9% at year-end. Pro forma for the Vehicle Finance sale, CET1 would be 14.7%, which she said reflected capital released by the disposal and the run-off of the Vehicle Finance book. Shareholders’ equity increased 3.8% to GBP 374.3 million, and tangible book value per share rose 5.8% to just under GBP 20.
Strategy reset: product expansion, digital solutions, and capital discipline
Corfield said the bank’s go-forward plan is built on three pillars:
- Product expansion within existing capabilities and adjacent markets
- Effective digital solutions to enhance customer experience and efficiency, while simplifying IT architecture
- Capital discipline, prioritizing returns over growth for its own sake
In Retail Finance, management highlighted opportunities beyond its established positions in furniture and jewelry, and growing exposure to healthcare. Corfield and V12 Retail Finance Managing Director Andy Phillips pointed to home improvements as a key growth opportunity, describing it as a market where customers often borrow larger ticket sizes over longer terms. Phillips said the addressable point-of-sale home improvement credit market is about GBP 3 billion, excluding what he called the increasing role of renewable technology (such as solar panels and heat pumps). He said V12 plans to introduce an eligibility checker enabling customers to understand borrowing capacity before a full application.
Within Business Finance, Managing Director Luke Jooste described two strategic product expansions: bridging finance and specialty lending (wholesale funding to non-bank lenders). He said bridging is a close adjacency to existing real estate lending, and that by the end of the first half of the year the bank expects to have a fully digital loan submission portal to access broker-led distribution channels. On specialty lending, he noted recent non-bank lender failures tied to collateral issues, saying the bank is aware of the risks and believes its asset-backed lending discipline can mitigate them.
In deposits, Savings Director Rajat Mehta emphasized opportunities to deepen customer relationships and expand product offerings. He cited GBP 3.5 billion of consumer deposits across 85,000 customers, with an average relationship size of GBP 41,000 and average tenure of 38 months. Mehta said customers with more products tend to hold larger balances, and outlined product expansion plans including tracker products and hybrid savings, along with targeting additional deposit pools such as charities and business deposits.
Medium-term targets and 2026 guidance
Corfield said the bank has reset its medium-term targets to two headline goals: 16%+ ROAE supported by around 10% annual net lending growth. He said the group expects the current lending mix—approximately a 60/40 split between Business Finance and Retail Finance—to remain broadly stable over coming years.
For 2026, Lawrence called it a “transitional year” as the bank launches new products and executes an accelerated cost program. Key guidance points included:
- Net lending growth of 8% to 10% in continuing divisions
- Cost-to-income ratio expected around 47% as investments and cost actions proceed
- CET1 ratio expected around 13.5% (with the bank targeting ~13% longer term)
- Risk-adjusted margins targeted to improve by around 10 basis points across ongoing divisions
- Discontinued activities expected to reach break-even as the exit completes
On capital returns, Lawrence said the bank intends to initiate a GBP 10 million share buyback over the next 12 months in multiple tranches, subject to regulatory approval. She described this as part of a capital framework that prioritizes maintaining CET1 at approximately 13%, investing surplus capital in the highest-return opportunities, and returning excess capital via dividends or buybacks where appropriate.
On costs, Lawrence said the exit from Vehicle Finance is expected to deliver more than GBP 25 million of annualized cost reductions by 2028, with around 90% of those savings achieved by the end of 2027. To accelerate the timeline, she said the bank expects an additional GBP 12 million of cost to achieve, on top of the previously guided GBP 5 million (clarified in Q&A as GBP 17 million total). She also said product growth initiatives would require around GBP 5 million per year of run-rate cost by 2028.
In Q&A, management said it had not seen a material shift in deposit market competition and did not expect the planned reduction in the U.K. cash ISA limit (referenced as not taking effect until 2027) to have a material impact on the bank’s ability to raise deposits. Executives also said AI is being considered through use cases—such as complaints handling and underwriting—though Corfield emphasized the near-term focus is on executing the core strategy and simplifying technology and data architecture.
About Secure Trust Bank (LON:STB)
Secure Trust Bank is an established, well‐funded and capitalised UK retail bank with over 70‐years of trading history. Secure Trust Bank operates principally from its head office in Solihull, West Midlands.
The Group’s diversified lending portfolio currently focuses on two sectors:
• Business finance through its Real Estate Finance and Commercial Finance divisions, and
• Consumer finance through its Vehicle Finance and Retail Finance divisions.
Secure Trust Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Secure Trust Bank PLC, Yorke House, Arleston Way, Solihull, B90 4LH.
