Secure Trust Bank PLC on Wednesday reported positive financial performance in the first half alongside successful cost optimisation, leading the company to raise its cost-savings target.

The Solihull, England-based retail bank said pretax profit rose 3.6% to £17.1 million in the half that ended June 30 from a restated £16.5 million the previous year.

Net interest income increased 8.9% to £88.2 million from £81.0 million, as operating expenses grew 3.6% to £51.6 million from £49.8 million.

Secure Trust Bank cut its interim dividend by 29% to 11.3 pence per share from 16.0p last year, saying this is in line with its move to a progressive dividend policy, which involve a rebasing of its current payout. A progressive policy means that the dividend will rise at least in line with earnings per share and won’t be reduced if EPS declines.

Chief Executive Officer David McCreadie said: ‘In the first half, we have delivered solid loan book growth and managed cost increases through our cost optimisation programme, Project Fusion. Today we are upgrading our cost-savings target for Project Fusion from £5 million to £8 million.’

Loan book growth was 3.2% to £3.42 billion versus 8.3% to £3.16 billion during the same period in 2023.

‘The macro-economic outlook remains uncertain, but the group remains confident it can continue to show agility, credit discipline and continue to grow the loan book profitably. The group expects further loan book growth in the second half towards the £4 billion target,’ the lender said.

‘The second half of 2024 saw the first Bank of England base rate cut for four years and the inflation outlook appears more benign, both of which we expect to boost demand in our business areas.’

Secure Trust Bank is still targeting ‘significant growth’ in year-on-year profit, although expects results to be ‘slightly below’ previous expectations.

Shares were down 2.8% to 830.00 pence each in London on Wednesday morning.

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