Costs mount up to £22m for Provident Financial in hostile takeover battle

Bradford-headquartered subprime lender Provident Financial has today revealed it has spent between £17m and £22m to date on the hostile takeover by its rival Non-Standard Finance (NSF). 

In a trading update this morning, the listed firm added published exceptional items for 2019, which also included costs of £10m in relation to a voluntary redundancy programme.

Leeds-based NSF announced in February is was undertaking a hostile takeover of Provident in a deal worth £1.3bn.  

Provident revealed the figures in a trading update for the period January 1 to March 31.  It said it was “continuing progress in rebuilding the Group and in delivering a clear vision for the future.” 

Provident said that its Vanquis Bank  division reported new customer growth that was 13% higher than the equivalent period last year. 

 The firm added: “Moneybarn has delivered record new business volumes representing growth of approximately 40% on the first quarter of last year

“Home credit’s recovery continues with new and returning UK home credit customer growth 27% higher than the first quarter of last year.” 

Provident said its Satsuma division had delivered new business and that lending volumes were 16% higher than the equivalent period last year.

The firm said that the Financial Conduct Authority (FCA) investigation at Moneybarn is close to being concluded.

 Malcolm Le May, Group Chief Executive, said: “I am pleased with the Group’s performance during the first three months of the year. We have diligently built on the stronger foundations established over the past 18 months and have delivered strong customer growth and new business volumes, with stable delinquency trends and overall results in line with management’s plans for 2019.  

“The completion of the ROP refund programme, the expected settlement of the Moneybarn FCA investigation in the near future and the recent agreement with the FCA to bring back enhanced performance management disciplines in our home credit business, demonstrate unequivocally that we are responding positively to regulatory change. We have put the Group’s legacy issues behind us.

“We have a clear strategy to deliver attractive and sustainable shareholder returns and good customer outcomes in an evolving industry and regulatory environment. Our goal is to achieve sustainable receivables growth of between 5% – 10% per annum and a return on equity in the range of 20% – 25%. In addition, we are focused on maintaining a dividend cover of at least 1.4 times as well as a prudent regulatory capital buffer against the total capital requirement prescribed by the PRA.” 

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