Secure Trust Bank (STB) has reported adjusted profit before tax of £31.3 million for the first half of 2026, a 9.4% increase on the £28.6 million recorded in the same period a year earlier. Including discontinued activities, total pre-tax profit rose 40.8% to £31.4 million, the uplift partly reflecting the wind-down of the group’s Vehicle Finance operation, which had previously weighed on reported earnings.
Net lending balances grew 4.9% to £3.5 billion over the six months to 30 June 2026, up from £3.3 billion at the end of 2025. Risk-adjusted margin held flat at 4.2%, which the bank attributed to pricing discipline and a cost of risk that edged down to 0.9% from 1.0% a year earlier. Adjusted return on required equity improved by 60 basis points to 14.5%, while total return on average equity rose 310 basis points to 12.3%.
Chief executive Ian Corfield said the results “already reflect strong execution” against a strategy set out in March 2026 and reinforced the group’s confidence in its medium-term targets. STB is aiming for annual lending growth of around 10% and a return on average equity above 16% by 2028.
The deal
The interim dividend has been lifted to 12.4 pence per share from 11.8 pence. A £10 million share buyback programme, which received regulatory approval during the period, is also under way, with the first £5 million tranche completed and the second planned for the second half of the year.
Cost control was a mixed picture. The adjusted cost income ratio of 46.5% is within guidance but widened by 100 basis points year on year, partly reflecting £5.5 million of cost savings delivered in the half. The annualised run rate of those savings is estimated at £15 million, based on a reduction in headcount from approximately 845 to 650 full-time employees following the Vehicle Finance exit, effective 1 July 2026. The group’s Common Equity Tier 1 ratio strengthened by 140 basis points to 14.3%, above the medium-term ambition of 13.0%.
On the product side, STB secured retail-finance partnerships with Magnet and Centrica British Gas during the period and onboarded 19 smaller home improvement retailers. In Business Finance, the group originated £40 million of bridging loans and established a new Speciality Finance team. A base-rate tracker savings product was launched alongside a first deposit-aggregator relationship. The retail finance app now has more than 660,000 registered users, up from 475,000 at the end of 2025.
Market context
STB operates in a specialist-lending segment that includes a handful of mid-tier challenger banks and building societies competing for near-prime consumer credit, asset finance and business lending. The group’s positioning in retail and point-of-sale finance aligns it with broader growth in buy-now-pay-later adjacent credit, though STB’s model relies on traditional instalment lending rather than interest-free structures.
The exit from Vehicle Finance is consistent with a wider industry trend of specialist lenders shedding capital-intensive, higher-risk sub-segments as the interest-rate environment normalises and cost-of-risk pressures ease. The CET 1 uplift from that exit gives STB incremental capital optionality, though management has so far directed that headroom toward the buyback rather than signalling further acquisitive moves.
With full-year guidance unchanged and the cost programme running ahead of its annualised target, the next meaningful milestone will be whether the newly formed Speciality Finance team can build sufficient pipeline in the second half to support the 8–10% annual lending growth target.
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