Secure Trust’s new lending reaches £3.3bn in 2023

According to Secure Trust’s financial report, its net loan book grew 13.6 per cent, with consumer finance’s net lending balances growing to £1.7bn, up from £1.4bn in the same period last year. This was following record new business lending of £1.7bn, which is an increase from £1.5bn in 2022.

In business finance, net lending balances reached £1.6bn, a rise from £1.5bn in 2022, and record new business lending reached £600m, an increase from £500m.

The company reported an impairment charge of £43.2m, which is an increase from £38.2m in 2022. This is due to a growth in new business and one material loss of £7.2m in commercial finance.

Secure Trust’s total profit before tax was £33.4m, which is down from £44m in 2022. This was impacted by £6.5m in “exceptional items” in 2023.

The firm said that in the second half of the year it had “engaged in formal discussions” with the Financial Conduct Authority (FCA) about its collections processes, procedures and policies.

This has led the firm to provide £4.7m in redress costs, and this has been an exceptional item along with corporate activity costs of £1.8m.

The net interest margin (NIM) fell to 5.4 per cent from 5.7 per cent, which it said was due to new Tier 2 Capital. It noted that this had led to a drop in the NIM, but that it offered “capital for growth”.

Market share growth in all four specialist lending areas aim

Looking at the outlook for the year, Secure Trust said that inflation was falling, and the base rate had likely peaked and will begin to fall in 2024.

It continued: “We sincerely hope this begins to ease the ‘cost-of-living’ burden on our customers and is the beginning of a period of relative economic stability, notwithstanding the impacts of the geopolitical environment.

“We will continue to make effective credit decisions and provide fair interest rates for our deposit holders, ensuring the group’s growth is safe and the business generates sustainable profits.”

The lender said that its “Optimising for Growth” strategic priorities will “continue to focus on delivering market share gains in our four specialist lending areas through enhancing our customer experience and leveraging our networks”.

“2024 will see further simplification of the group, which alongside lending book growth, should further improve cost income ratios. The year has started well, with net lending balances in line with our expectations and we have identified opportunities for further cost efficiencies.

“We are well-positioned to deliver our medium-term targets and face the future with confidence,” it said.

Secure Trust has made ‘significant progress in 2023’

David McCreadie, Secure Trust’s chief executive, said that Secure Trust had made “significant progress in 2023 against our strategic priorities”.

He continued: “We delivered strong lending growth of 13.6 per cent by enhancing our customer experience and leveraging our distribution networks. We continued to manage our growth carefully to generate an appropriate risk-adjusted margin. All four specialist lending businesses delivered record levels of new business lending in 2023.

“Our strategy to simplify the group continues at pace, with further cost optimisation savings delivered during the year. We are on track to deliver our upgraded target of £5m of annualised savings by the end of 2024.”

He added: “Once again, we have demonstrated our ability to grow in 2023, and the group is well-placed to realise our ambitions. We are well on our way towards our £4bn net loan book target and delivery of our 14-16 per cent return on average equity target. We remain confident about the future.”