STM Group Plc (LON:STM), the cross border financial services provider, has announced a new interest sharing policy with some of its pension members.
The policy will unify the Group’s approach in this regard and will bring it in-line with other providers that have a similar interest sharing policy. As part of this change and given the significant rise in bank interest rates over the last six months, the Company has been negotiating with its banking partners to obtain the best rates offered by them. The policy will come into force from 1 July 2023 and is expected to contribute at least £1 million annualised profit before tax going forward.
In addition to the above, income generated from client assets is expected to be higher in the current year than in prior year as a result of the increasing interest rates. Both these uplifts will compensate for lower than expected new business and some significant non-recurring costs incurred such as the third party costs in relation to the strategic review. Recurring administration revenue from existing customers remains in line with management expectations.
Alan Kentish, CEO of STM Group, commented: “In a higher interest rate environment this approach gives STM an opportunity to actively manage the yield opportunity for all stakeholders and keep product fees competitive.”
