Secure Trust Bank (STB) saw asset finance revenues for 2017 grow 9% to £8.5m (€9.7m) year-on-year, as the business reassesses its partnership with broker Haydock Finance after the latter’s acquisition by an investment management firm.
Lending balances were stable at £116.7m. Impairments rose by £400,000 to £1m. STB attributed the lack of portfolio growth to the decision, in 2016, to “limit exposure to some SME markets”.
In August of last year, chairman Michael Forsyth and chief executive Paul Lynam said the bank was limiting exposure to possible economic downturns through tighter underwriting and restricting contracts’ loan-to-value ratios to below 100%.
The bank said that following the acquisition of Haydock Finance by funds within Apollo Global Management, it was in discussions with the broker to assess the future of their partnership.
Across invoice finance, revenues grew 56%, reaching £7.2m, next to minimal impairments. Lending balances more than doubled to £126.5m.
STB said it was looking to develop a regional presence for invoice finance, “which will provide the group with a more scalable business model”.
The bank highlighted the introduction of an updated retail savings platform in Q4 2017 as a low-cost way to raise more funding for short-term lending activities, including invoice finance.
STB said: “The UK invoice finance and asset finance markets are large, fragmented and growing markets of around £20 billion each.
“We see significant future growth potential and would be interested in acquiring businesses in these spaces if the risk profile and economics of any transaction are attractive.”
Across the whole STB group, excluding discontinued operations in unsecured lending, operating income grew 21% to £129.5m. Profits after tax rose 40% to £19.9m.
Chairman Forsyth said: “2017 was Secure Trust Bank’s 65th year of operations, during which we have been able to increase profits on our continuing operations whilst successfully executing a very significant strategic repositioning of the group’s activities.
“The group enters 2018 well positioned to deliver substantial progress in the periods ahead.”