Sub-prime lender Provident optimistic despite post-Brexit slump

Provident Financial is optimistic that it has had a successful 2016 across the board, despite losing 15% off its market capitalisation last year.

The Bradford-based company is the UK’s largest sub-prime lender, and operates through its brands Satsuma, glo, Vanquis Bank and Provident Home Credit.

It began the year in the FTSE 100 but lost 15.4% despite recovering from its post-Brexit slump.

Now the lender has launched 2016 predicting that its performance will be “in line” with market expectations, which suggest the group will deliver profit before tax, amortisation of acquisition intangibles and exceptional items of £333.9m.

In its divisions, Vanquis Bank delivered a 9% growth in customers to 1.55m and Provident said it is on track to produce receivables growth for the year of approximately 14%.

Its Consumer Credit Division (CCD) reported sales some 3% up on the fourth quarter of 2015.

Provident’s Satsuma brand looked particularly “encouraging” said the lender, and customer numbers and receivables ended the year at 55,000 and £18m respectively, up from 49,000 and £14m at September 2016. It said that the start-up loss associated with Satsuma has been reduced by approximately £12m in 2016 as the business approaches break even.

Moneybarn, which deals with second hand cars in the non-standard credit market had a quieter fourth quarter but saw new business volumes increase by approximately 7%. Customer numbers and receivables ended the year at 41,000 and £297m, showing year-on-year growth of 32% and 35% respectively.
Funding

Peter Crook, chief executive of the Bradford-based group, said:”I am pleased to report that each of our businesses continued to trade well through the final quarter of the year and the group is expected to report 2016 results in line with market expectations.”

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