Secure Trust Bank’s ‘refined strategy’ sees real estate lending double to £376m in 2021

The bank put this down to its Greener Homes Scheme which helps property developers and investors meet the UK’s clean growth strategy by 2035. Launched in June, the scheme comprises two products – the Green Residential Investment Loan, and the Green Improvement Residential Investment Loan. 

The products offer lower rates to borrowers investing in green residential investments or those who are upgrading existing properties to make them more energy efficient.  

Secure Trust Bank said the real estate division had a slow first half of the year due to Covid-19 restrictions. However, it still managed a 5.5 per cent increase in lending balances to £1.1bn which it said it was “pleased to report”. 

Revenues increased by 1.5 per cent to £54.8m as the loan book mix moved towards investment loans and away from higher margin development loans. 

During the year, the mix of investment loans increased from 74 per cent to 87 per cent, which it said reflected the maturity of a large number of development loans.  

The groups net interest margin improved to 6.4 per cent, up from 6.3 per cent in 2020. It reported a net interest income of £150.8m, a 0.1 per cent decline on the previous year.  

The bank also exited the residential market in 2021, with the sale of its loan book which was purchased by financing vehicle Jacqali Designated Activity Company for £54.6m. This resulted in a loss of £1.3m. 

It also sold its debt purchase arm.

Secure Trust Bank said this was part of its strategy to refine its position with an aim to be the “most trusted specialist lender in the UK”. 

It said its structure had been simplified following the sale of its non-core portfolios, allowing it to focus on markets where it saw the “greatest potential”. 

It continues to lend in the commercial, development and real estate finance spaces. 

It added: “The group will continue to invest in its digital platforms to improve its operational efficiency and invest in innovation with new products designed to meet the needs of our customers.” 

Overall, Secure Trust Bank reported a profit before tax of £56m, up on 2020’s £19.1m. 

David McCreadie, chief executive, said: “I reflect on my first year with great pride and satisfaction despite the continuing impacts of Covid-19. We have delivered strong financial results, but as importantly, we have reset the group with a new vision and core purpose and the group is growing strongly again.  

“I am very optimistic about our ability to take advantage of the diverse opportunities within our specialised lending businesses, despite the potential for economic headwinds. 

“My confidence is founded on our excellent performance in 2021, our simplified structure, and our clear plan to deliver further lending growth and attractive returns.”