Secure Trust Bank’s development finance loan book swells to more than £1bn

In its final year results to 31 December, Secure Trust Bank (STB) posted a 9.3 per cent year-on-year rise in its real estate finance balances from £962m to £1.05bn despite a significant reduction in new business.

Profit before tax slumped by 48 per cent, however, from £38.7m in 2019 to £20.1m.

Although new borrowing decline, STB continued to advance funding to its existing development finance customers when their projects were allowed to restart after the first lockdown restrictions were lifted.

The bank said it was unsurprising that it saw lower levels of customers refinancing their deals when the loan agreements had come to an end because of a ‘slowdown’ in the market.

It said the difficult economic conditions led to an increase in impairment charges in 2020 but low loan to value (LTV) lending and close management of its portfolio had helped to minimise the risk of the charges.

Last year the bank granted payment holidays to 29 customers, either in relation to capital or interest payments or both. These related to loans with exposures of £191.9m.

By the end of the year, this had reduced to two borrowers with exposure of £16.6m.

The real estate division’s immediate focus is risk management and supporting existing borrowers, adding, “we will manage our appetite in respect of new lending opportunities which arise as the economic conditions become clearer going forward”.

David McCreadie, chief executive, said: “Our performance last year demonstrated the many strengths of STB. The experience of our team, our diversified portfolio and the short duration of our balance sheet allowed us to navigate through the uncertainty with agility and effectiveness.

“I am excited about the journey ahead. We are well-positioned in attractive, specialist lending markets and see a clear opportunity to build on our strong foundations.

“STB will become simpler, more efficient, and clearer in its growth ambitions. I am confident in our ability to return to growth and create sustainable value for our stakeholders.”