Vanquis strength helps drive Provident
HOME credit lender Provident Financial today announced a strong rise in half year pre-tax profits fuelled by the success of its Vanquis Bank operation.
The Bradford-based business now offers credit cards to lower income consumers in addition to its home credit operation in the UK and saw pre-tax profits before exceptional recstructuring costs increase by 23% to £94.1m from £76.5m in the six months to June 30.
Vanquis Bank saw its pre-tax profits increase by 36% to £68.3m while its new Polish business saw its start-up losses rise by £1m to £4.6m but Provident said it is gaining “momentum”.
Provident Financial, which has 2.5m customers in the UK and Eastern Europe, saw adjusted earnings per share up 24.6% to 54.2p and it is to pay an interim dividend of 34.1p, up 10%.
The group said the repositioning of its consumer credit division (CCD), which includes its Satsuma loans operation, is progressing well with the business contributing pre-tax profit of £37m, up 2.5%.
Chief executive Peter Crook, said: “Vanquis Bank has delivered further strong growth through developing its presence in the under-served, non-standard credit card market with first-half UK profits up 36.1%. The positive momentum from evolving the marketing and distribution of the credit proposition in the Polish pilot operation is also encouraging.
“CCD continues to make excellent progress in repositioning the home credit business as a leaner, better quality business focused on returns rather than growth, whilst the build-out of the capability to support the rapid development of the Satsuma online instalment lending business will be completed by the end of the year.
“In the light of this strong trading performance, I am pleased to announce a 10.0% increase in the interim dividend which is also fully supported by adjusted earnings per share growth of 24.6%, strong capital generation and an extremely robust funding and liquidity position.
Credit quality in both businesses is very good and provides the foundation for delivering good quality growth for 2014 as a whole.”
