Cattles upbeat thanks to ongoing demand

FINANCE group Cattles today said it was confident of its prospects for the year thanks to continuing demand for its products.

In a trading update for the period ended 31 May 2008 the Leeds-based lender said that good progress was being made in each of the group’s businesses and demand for it’s consumer finance products has continued to grow.

The group said that in the face of this increase in demand, and taking account of the pressure on household budgets from higher fuel, food and utility costs, it had tightened credit criteria for new customers to enable credit quality to be maintained.

The result has been a drop in growth in Cattles Welcome Finance business as acceptance rates fell from 6.3% to 5.3%.

The group said it’s loan loss ratio has remained stable at 8.4% and that credit quality “remains robust”.

Earlier this month Cattles announced more than 95% of shares had been sold under its rights issue.

Cattles introduced the rights issue to support an application for a banking licence and funding diversification, reducing its dependence on wholesale funding.

The group announced that “good progress” was being made in this area and that it has appointed Robert East to lead the banking licence application – adding it expects to get approval to raise retail deposits later this year or early in 2009.

The rights issue, together with the group’s debt facilities and retained earnings, will provide the group with the necessary capital to support organic growth and an application to the Financial Services Authority for a banking licence enabling the lender to accept retail deposits for the first time in its history.

Going forward Cattles said it was looking forward to the continued successful development of the group’s businesses and viewed prospects for the rest of the year with confidence.