Banking group swings to a first half loss
Bradford-headquartered Vanquis Banking Group, formerly Provident Financial, has reported an adjusted loss before tax of £5.5m (H1 2022: adjusted profit before tax of £54.3m) in its interim results for the six months ended 30 June 2023.
It also made a statutory loss before tax from continuing operations of £14.5m (H1 2022 profit before tax: £46.9m) but notes its capital and liquidity positions remain robust, and ahead of regulatory requirements.
The consumer finance group says it delivered strong receivables growth during the period, enabled by its risk management framework, capital base and competitive market positioning.
Malcolm Le May, commenting on his final set of results as chief executive officer, said: “We maintained our focus on disciplined receivables growth amid uncertain macroeconomic conditions, tight cost controls given persistently high inflation, and continued business investment to establish an operating platform for the future.
“The group’s focus on enhancing asset quality, whilst operating in growing mid-cost and near-prime markets, enabled the group to deliver attractive but disciplined receivables growth of 26% year on year.
“This resulted in an adjusted loss before tax of £5.5m (H1’22: adjusted profit before tax £54.3m) reflecting primarily the IFRS 9 impact of strong loan book growth, together with unplanned inflation driving higher costs.
“Given the focus on lower-risk mid-cost and near-prime markets in recent years, delinquency and arrears rates were broadly stable during the period despite a more challenging macroeconomic backdrop than anticipated at the start of the year.”
Vanquis Bank says persistently high inflation during H1 2023 added approximately £12m to its cost base.
It adds management will continue to address the group’s underlying cost base in H2 2023 to mitigate the impact as much as possible.
Earlier this year, the group confirmed it had successfully repositioned itself in the mid-cost and near-prime segments of the market, with a focus on lower risk customers, resulting in a lower credit risk profile.
