Secure Trust Bank PLC (LSE:STB) shares rose 11% after the specialist lender posted a strong set of first-half results and announced an increased interim dividend.
Adjusted pre-tax profit jumped 36% to £23.3 million, supported by 6% loan book growth to £3.8 billion, an improved cost-to-income ratio of 49.1%, and record customer deposits of £3.5 billion.
Statutory pre-tax profit climbed 30% to £22.3 million, with net interest margin edging up to 5.4%. Cost of risk held steady at 1.7%.
The group’s July decision to exit new Vehicle Finance lending will allow capital to be redeployed into higher-return specialist lending.
Departing CEO David McCreadie said the pivot, alongside a refreshed strategy to be unveiled in Q4, would support sustainable returns. The dividend rises to 11.8p per share, payable in September.
Shore Capital called the update “encouraging”, highlighting higher profitability, improved return on equity, tangible book value growth, and a return to capital generation.
Following the favourable Supreme Court ruling on motor finance commissions, STB expects no major change to its £6.4m provision.
ShoreCap lifted its fair value to 2,170p from 1,970p, citing reduced legal tail risks and attractive FY25 price-to-book and price-to-earnings multiples of around 0.5x and below 5x, respectively.
The shares rose 120p to 1,220p.