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Trust group eyes further expansion following Jersey acquisitions

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Cost-efficiency drives and a self-help strategy have paid off for trust company and wealth management firm STM Group, according to executives who expect the group to reduce further its dependence on the UK market in 2011.

The group, which has its headquarters in Gibraltar and a growing presence in Jersey as well as offices in Spain, Malta and Switzerland, saw profits double in 2010 following cost-cutting efforts and the acquisition of Zenith Trust, its third in Jersey, in April last year.

The group, which is listed on London’s AIM market, expanded into the Channel Islands with the purchase of Compagnie Fiduciaire Trustees in December 2007 and added St George Financial Services the following June.

Pre-tax profits rose to GBP1.5m from GBP700,000 in 2009, while revenue grew from GBP8.5m to GBP10.5m, and STM is confident of further growth in 2011, according to chief executive Colin Porter and chief financial officer Alan Kentish (pictured).

They say the acquisition of Zenith last year with good management in place was key to building the platform for growth. “2009 was not an easy year and there was cost-cutting, but we’re back on track now with a robust business model and good visibility,” Kentish says. “We’ve found our pathfinder in Jersey, our second engine room, which is Zenith Trust.”

The Zenith purchase has brought new introducers to the company, says Porter, adding that this year should see a widening of horizons away from UK markets for STM, which offers trust, corporate and wealth management services to high net worth individuals, cross-border investors and expatriates.

“We manage 2,500 entities under management across the business, and we have historically been mainly UK-focused,” Porter says. “But the market is becoming more competitive, and we have decided to focus more on European service providers and non-EU jurisdictions such as Jersey and Gibraltar.

“STM’s wider international presence, extended financial product range and significant steps to improve its operations, particularly from a new business perspective, make the group confident about its prospects for 2011.”

Toward the end of last year STM opened an office in Sliema, Malta. “We have a good strong name and regulated entities in five jurisdictions, giving us the geographical reach we need to give a wider spread offering for our high net worth clients,” Kentish says.

Some revenue is being reinvested into business development, with a focus on products such as pensions, life insurance wrappers and Qualifying Recognised Overseas Pension Schemes (QROPS) for UK expatriates and foreign nationals that have worked in the UK, as well as private clients.

“These are the little fireworks we’re hoping to light the blue touchpaper on,” Kentish says.

STM’s Jersey business has 35 staff and recorded turnover of GBP4m last year.
 

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