Secure Trust Bank anticipates lower profits following motor finance industry upheaval

Secure Trust Bank has announced a cut in its profit forecasts for the current year, attributing the revision to the performance of its motor finance division.

The London-listed bank provided a trading update today, indicating that after the Financial Conduct Authority's decision on motor finance, it resumed normal levels of vehicle finance loan collections activity, as reported by City AM.

The Solihull-based bank also noted that early arrears in vehicle finance are at a three-year low. However, it acknowledged that the process of recovering value from an excess level of defaulted balances is more protracted than initially anticipated, with some recoveries expected to extend into 2025.

As a consequence, Secure Trust Bank anticipates profits to fall short by £10m to £15m this year.

Following the announcement, analysts have revised their target prices f