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Rival firms 'mispricing' unsecured lending, Secure Trust CEO says

The CEO of U.K.-based Secure Trust Bank PLC, Paul Lynam, claims that rival firms are "mis-pricing" credit cards and other forms of unsecured lending, The Telegraph reported Aug. 8.

Lynam told the newspaper that the retail bank's move away from unsecured credit in 2017 — after the sale of the subprime lender Everyday Loans Holdings Ltd. in 2016 — paid off, with the firm reporting an increase in half-year profits.

On the danger of mispricing risk in unsecured credit, Lynam said, "we could suddenly have a very disruptive trade war that results in a rise in the cost of living (and more defaults on credit)."

Instead of offering unsecured credit, including subprime car loans, Secure Trust now focuses on growing its business in the areas of real estate, lending against company invoices, and helping retailers offer "buy now pay later" financing.