Provident Financial expects ‘good’ results

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DOORSTEP lender Provident Financial said it expects a good set of annual results, helped by growth at its Vanquis Bank and consumer credit divisions.

Bradford-based Provident Financial, which lends to people who cannot get credit from mainstream banks, added that it has a strong funding and liquidity position.

“I am pleased to report that the credit quality in both businesses remains extremely sound, fully justifying the group’s cautious approach to lending at a time when customers’ real incomes are under pressure from inflation and there are risks surrounding the future direction of the employment market,” said chief executive Peter Crook said in a statement.

“The deposit taking programme at Vanquis Bank has got off to an excellent start. Not only does this further diversify and strengthen the group’s funding, but it provides the stand-alone financing required by Vanquis Bank in pursuing its attractive medium-term growth opportunity.”

Vanquis is on track to raise a total of £100m to £125m by the end of 2011, said the group. The bank’s customer numbers had risen to 659,000 by the end of September, year-on-year growth of 31.5 per cent. It added this has seen average receivables grow by about 35 per cent in the nine months to September 30.

Provident’s second call centre in Bradford is now open to support Vanquis’s growth.

Provident added both customers and its agents are being “relatively cautious”, which is dampening demand for credit.

“Tight underwriting standards remain in place and the business has continued to focus on serving good quality existing customers and reducing the proportion of credit being issued to new customers,” it said.