Provident Financial profit misses

SUBPRIME lender Provident Financial posted lower-than expected profit in the full year as customers were more cautious in their borrowing habits, a trend which is likely to continue in 2010, it warned.
By The Newsroom
Published 2nd Mar 2010, 08:54 BST
Updated 2nd Mar 2010, 08:56 BST

The Bradford-based firm, which specialises in loans to people who usually need to borrow less than 500 and pay it back in weekly installments, posted a 2.4 per cent drop in full-year pretax profit of 125.7m.

Market expectations had ranged between 146.7m and 156m.

"Existing customers exhibited increasingly cautious behaviour during 2009 which tempered demand for credit and was exacerbated by the adverse weather conditions during the peak trading weeks in December," said the group in a statement.

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"Cautious consumer behaviour is expected to persist through 2010, resulting in relatively modest growth in receivables. As a result, there will be a strong focus on cost efficiency," it added.

The company previously said that it had slowed the rate of new customer growth in 2009 at its consumer credit division and that it will continue its cautious approach to lending until unemployment stabilises.

It added that it will maintain this stance throughout 2010 as it anticipates little change in employment conditions "for some time."

The group, which raised 160m for organic growth at the end of 2009, said customer numbers grew 5.4 per cent to 2.3m in 2009.

Related topics:Provident FinancialBradford