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Secure Trust Bank Faces Increased Provision Due to FCA Motor Finance Redress Proposal

Story Highlights
  • Secure Trust Bank anticipates increasing its motor finance redress provision by £16 million.
  • The FCA’s proposal could reduce STB’s CET1 ratio to 12.8%, still above regulatory requirements.
  • Looking for the best stocks to buy? Follow the recommendations of top-performing analysts.
Secure Trust Bank Faces Increased Provision Due to FCA Motor Finance Redress Proposal

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Secure Trust Bank ( (GB:STB) ) has shared an update.

Secure Trust Bank PLC (STB) is responding to a Financial Conduct Authority (FCA) consultation paper proposing a redress scheme for motor finance commissions. The bank anticipates increasing its provision for motor finance redress by approximately £16 million, bringing the total to £21 million, due to the potential broadening of the redress scheme’s scope. The FCA’s proposal, which is still under consultation, could significantly impact STB’s financials, reducing its Common Equity Tier 1 ratio by about 50 basis points to 12.8%, though still above the regulatory requirement. STB has expressed concerns that the FCA’s approach to assessing unfairness does not align with a recent Supreme Court judgment and plans to engage with the FCA for further discussions.

The most recent analyst rating on (GB:STB) stock is a Hold with a £1029.00 price target. To see the full list of analyst forecasts on Secure Trust Bank stock, see the GB:STB Stock Forecast page.

Spark’s Take on GB:STB Stock

According to Spark, TipRanks’ AI Analyst, GB:STB is a Neutral.

The overall stock score reflects a mixed financial performance with stable revenue but pressured profitability margins and cash flow challenges. Technical indicators suggest a potential reversal from a bearish trend, while the valuation indicates the stock is undervalued with a reasonable dividend yield.

To see Spark’s full report on GB:STB stock, click here.

More about Secure Trust Bank

Secure Trust Bank PLC is a well-established UK retail bank with a 72-year trading history, headquartered in Solihull, West Midlands. The bank operates primarily in two core sectors: Business Finance, through its Real Estate Finance and Commercial Finance divisions, and Consumer Finance, through its V12 Retail Finance division. It is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.

Average Trading Volume: 129,756

Technical Sentiment Signal: Buy

Current Market Cap: £164.8M

For detailed information about STB stock, go to TipRanks’ Stock Analysis page.

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