Publication of a Prospectus

RNS Number : 0329M

Secure Trust Bank PLC

07 October 2016

 

7 October 2016

Secure Trust Bank PLC ("Secure Trust" or the "Company")

Announcement of Publication of Prospectus

Further to previous announcements Secure Trust is pleased to announce today the publication of the Company's prospectus (the "Prospectus") in relation to admission of its 18,191,894 ordinary shares of £0.40 par value to the premium segment of the Official List of the UK Listing Authority (the "Official List") and admission to trading on the London Stock Exchange plc's ("LSE") Main Market for listed securities (the "Main Market") (together, "Admission") and cancellation of trading of its shares on the AIM market of the LSE ("AIM"). It is expected Admission will become effective and that dealings will commence at 8:00 am on 12th October 2016.

The Company is not raising any funds or issuing any new shares in connection with Admission. The Company's TIDM code on the London Stock Exchange will remain 'STB' and its ISIN will remain GB00B6TKHP66 and SEDOL number B6TKHP6.

Availability of Prospectus

The Prospectus has been approved by the UK Listing Authority and is available for inspection on the Company's website at www.securetrustbank.com/corporate-information and on the National Storage Mechanism at http://www.morningstar.co.uk/uk/NSM. Copies of the Prospectus are also available at the Company's registered address at One Arleston Way, Shirley, Solihull, West Midlands, B90 4LH.

Expected timetable

Publication of Prospectus	7 October 2016
Last day of trading of the Shares on AIM	11 October 2016
Expected delisting of the Shares from AIM	8.00 a.m. on 12 October 2016
Expected admission of the Shares to the Official List	8.00 a.m. on 12 October 2016
Expected commencement of dealings of the Shares on the Main Market	8.00 a.m. on 12 October 2016

The times and dates set out in the expected timetable of principal events above and mentioned in this document, and in any other document issued in connection with Admission are subject to change by the Company, in which event details of the new times and dates will be notified to the UKLA, the London Stock Exchange and, where appropriate, shareholders.

About Secure Trust Bank PLC

Secure Trust Bank is an established, well-funded and well-capitalised UK retail bank with a 64 year trading track record. Secure Trust Bank operates principally from its head office in Solihull, West Midlands, and had 630 employees (full-time equivalent) as at 30 June 2016. The Group's diversified lending portfolio currently focuses on two sectors (i) Business Finance through its Real Estate Finance, Asset Finance and Commercial Finance divisions and (ii) Consumer Finance through its Personal Lending, Motor Finance and Retail Finance divisions.

Trading Update

The Group has traded in line with the Directors' expectations during the third quarter of 2016.

The Group's consumer lending activities in the Motor Finance, Retail Finance and Personal Lending divisions have continued to see strong demand. The Group has not seen any discernible shift in the behaviour of its customers following the EU referendum decision.

Over the last twelve months, the non-prime sector of the motor finance market has seen significant competition from non-bank owned new market entrants and certain existing lenders who historically focused only on prime lending. These new entrants competed by charging relatively low rates of interest to borrowers, offering very high introducer commission rates and competing aggressively to attract staff. The Group considers this approach to growth to be unsustainable and chose not to compete for the segments of business being targeted on these terms. Notwithstanding this challenge, the Group has been able to achieve strong lending growth in its Motor Finance division reporting a 35 per cent increase in customer lending balances for the twelve month period ending 30 June 2016 through a focus on originating across a broader spectrum of the market. More recently, the Directors believe that these competitors have been retrenching, with at least one completely withdrawing from the market. The retrenchment and withdrawal of these lenders may present organic opportunities for the Group to write additional business on a sustainable risk adjusted yield basis consistent with the Group's strategy. The Group continues to adopt a cautious approach to its SME lending activities. Exposures to Central London residential developers are being carefully managed and the balance of the Real Estate Finance division's portfolio continues to shift towards residential investment lending which has continued to grow in line with expectations. Recent new business origination in the Asset Finance division has been focused on lower loan to value lending. This is designed to protect the Group in the event that the 2017-18 economic slowdown forecast by the Organisation for Economic Co-operation and Development and Standard & Poor's, amongst others, results in lower values of used assets. The Directors consider this approach to be prudent pending the emergence of greater clarity regarding macro-economic trends. The Directors are pleased to note that having commenced operations in September 2014, the Group's Commercial Finance division has generated profitable growth in customer numbers during the third quarter of 2016.

The Group continues to monitor developments in the housing market generally and the residential owner occupied mortgage market in particular. Though the rate of UK house price growth is slowing according to recent data, the Directors believe that the fundamental supply and demand dynamics continue to support the UK housing market even given the increased levels of uncertainty following the EU referendum decision. The Directors believe that the Group can enter the mortgage market and over time build a profitable and sustainable business. The Group's residential mortgage proposition is expected to launch early next year.

The Group completed the closure of its personal current account product, as planned, in September 2016. The closure of this product simplifies the Group's operating model and removes the management challenges and risks associated with the product. This product generated less than 3 per cent of the Group's operating income in the year ended 31 December 2015 and its closure is not expected to have a material impact on earnings.

The Group has continued to see strong demand for its deposit products. It has taken steps to reflect lower market prices whilst continuing to offer attractive market facing rates on savings. The implementation of a new digital deposit platform is progressing in line with expectations.

Sir Henry Angest, Non-Executive Chairman of Secure Trust Bank PLC, said:

"It is almost exactly five years since the Bank's IPO on AIM on 2 November 2011. Since then the Bank has delivered total shareholder returns approaching 300%. The Directors continue to believe that over time Brexit will create more opportunities than threats for well-funded and well-capitalised smaller banks.

The move from AIM, which has served us well, to a premium listing on the Main Market of the London Stock Exchange is a natural progression and positions the Group for its next phases of growth which will continue to be built around the three strategic priorities of organic growth, diversification and M&A activity."

Enquiries:

Secure Trust Bank PLC Paul Lynam, Chief Executive Officer Neeraj Kapur, Chief Financial Officer	Tel: [phone]
Stifel Nicolaus Europe Limited (Sponsor and Broker) Robin Mann Gareth Hunt Stewart Wallace	Tel: [phone]
Canaccord Genuity Limited (Nomad and Joint broker) Sunil Duggal Andrew Buchanan	Tel: [phone]
Bell Pottinger (Financial PR) Dan de Belder Aarti Iyer	Tel: [phone]

Disclaimer

Stifel Nicolaus Europe Limited ("Stifel") has been appointed as sponsor in relation to Admission. Stifel, which is regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with Admission and will not regard any other person as a client in relation to Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for advising any other person on the contents of the prospectus or on any other transaction or arrangement referred to in this announcement.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

This announcement contains statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. The forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth and strategies. The forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance and each of the Company, Stifel and their respective directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, except where it would be required to do so under applicable law.

Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.

 

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