Vanquis Bank to miss key targets after review forces £40m write-downs
Vanquis Bank has been forced to write-down £40m after a review of its balance sheet, which will result in it missing key financial targets this year.
The Bradford-based consumer finance specialist has been hit by a £29m revaluation in its vehicle finance lending, with £16m of that from previous years’ results, and a further £11m in other write-downs relating to a mobile app and property.
Vanquis Bank’s chief executive Ian McLaughlin said: “We have been carrying out a comprehensive review of our balance sheet and this has led to the revaluation of some historic balances.
“While finding these one-off items is disappointing, it does mean that our financial position is now clearer and more stable.”
Vanquis has told shareholders it “does not expect to meet its FY24 guidance of low single digit ROTE [return on tangible equity]”.
It also expects to end the year below the target Tier 1 ratio range of 19.5% – 20.5% set by the board in March, although it will remain well above its regulatory capital requirement.
More positively, Vanquis has reported that its trading performance “began to recover” towards the end of the six-month period to June. It had launched a transformation strategy in March and said it is “on track” to deliver £60m of cost savings by the end of this year.
McLaughlin added: “Our trading performance towards the end of the first half of 2024 was encouraging, with year-to-date growth in customer numbers, at better margins, and a return to growth in receivables in June.”
