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August 15, 2019

Secure Trust Bank Commercial Finance reports growth in H1 2019

The commercial finance arm of Secure Trust Bank has continued to grow in h1 2019, following the cessation of asset finance activities in 2018.

By Christopher Marchant

The commercial finance arm of Secure Trust Bank has continued to grow in the first half of its financial year, following the cessation of asset finance activities in 2018.

Following the decision to cease new business in 2018, STB said its asset finance portfolio has continued to run-off with lending balances continuing to reduce in 2019, down by 51% against H1 2018, and 32% since December 2018, with a consequent impact on income levels down from £3.8m to £1.9m year-on-year. Impairment levels have also reduced, with a charge of £300k in H1 being £600k (66%) lower than in H1 2018.

According to the interim results: “Growth is expected to continue in real estate finance, commercial finance, motor finance and retail finance, with no immediate plans to re-enter the asset finance or mortgages markets.”

Commercial Finance lending revenue was £8.4m, up from £6.2m in H1 2018, a year-on-year increase of 35%. The firm has now provided £220.7m worth of funding to UK businesses up to 30 June 2019, an increase of £33.2m in comparison to the same time last year.

The Manchester-headquartered firm provides funding for a range of situations, including management buyouts and buy-ins, restructurings and turnarounds as well as service-led refinances.

Over the last year, the business has opened new offices in Leeds and Birmingham in 2018, and a further London office in May this year. The commercial finance team recently announced it had funded over £3bn of client invoices, making it one of the largest independent operators in the invoice finance market.

Notable transactions in the six months to 30 June 2019 include a £14.75m finance facility to Formaplex, to support the moulding tool company’s investment in new machinery as it looks to expand its product range. Secure Trust Bank Commercial Finance also provided a £5m invoice finance facility to BCW Manufacturing Group, as the manufacturer looks to expand its factory space and production line.

John Bevan, managing director at Secure Trust Bank Commercial Finance, said: “Our Commercial Finance business has continued to perform strongly, with consecutive year-on-year growth since our inception five years ago. The business lending market is currently a challenging space due to political uncertainties, but we have remained committed to supporting UK businesses and provided funding that will boost growth and benefit the economy.

“Having expanded our geographical reach, we have been able to support more customers than ever before, which has helped us firmly establish ourselves as a leader in the asset based lending market. We are confident that we will continue this exceptional growth into the second half of the year and beyond.”

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