Secure Trust Bank pulls out of vehicle finance market

Secure Trust Bank (STB), which owns V12 Vehicle Finance, has confirmed it is pulling out of the motor finance market.

STB, which launched V12 Vehicle Finance only six years ago, and operated the Moneyway brand in the near-prime motor finance sector since 2009, will consult with impacted colleagues, expecting 284 roles to be at risk by 2030, including 78 roles at risk in FY2025.

The bank will run off its existing vehicle finance book as it naturally winds down its vehicle finance decision.

It said the vehicle finance generated a pre-tax loss of £21.8 million for its 2024 financial year.

Vehicle finance accounted for approximately 30% of the group's adjusted operating costs in FY2024. The group will streamline its cost base as the loan book runs down, which it said will enable more than £25m of operating costs to be removed by 2030.

As at June 30, 2025, the average consumer loan length outstanding was 37 months. The longest contractual loan agreement is 60 months.

Nearly £7m in costs related to FCA review and potential redress scheme

STB said that in light of legal and regulatory developments, including the Financial Conduct Authority's (FCA's) ongoing review of the historical discretionary commission arrangements in the motor finance market, and the Court of Appeal's judgment, which is currently under appeal, the group had recognised costs of £6.9m (£5.2 million potential redress, £1.7 million costs, of which £6.4 million was recognised as a provision) for both DCA and fixed motor finance commission structures.

David McCreadie, Secure Trust Bank chief executive (pictured), said: “We have made the difficult decision to stop new lending in vehicle finance, our lowest-return business line, and to redeploy capital to our three higher-returning businesses of retail finance, real estate finance and commercial finance.

“This pivot will allow the group to prioritise these established specialist businesses and achieve further simplification of the group, combined with the removal of a significant level of costs.  These measures will have a material positive impact on ROAE for the group and will position the group to be capital accretive.

"We will be consulting with impacted colleagues to explain why this pivot in our strategy will drive the future sustainable success of the group."

A further update will be provided in the STB's interim results for the six months ended June 30, 2025, which are set to be released on August 14.