Provident Financial provides clarification regarding future performance targets

The board of Provident Financial today published a clarification regarding its future performance targets which it said were not intended to forecast a particular level of profit.

Provident Financial has provided a clarification over its performance targets for the City. Photo: Anthony Devlin/PA Wire

In a statement issued today, the Provident board referred to its “Trading Statement and Vision for the Future” release on May 3 2019 and, in particular, the references to future performance targets contained within the section “What this means for shareholders?”

The Provident Board said it wishes to clarify as follows: “We are confident that, through our clear strategy and our complementary, synergistic and industry-leading businesses, we will deliver an attractive investment for shareholders.

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“As we transition to a model in which Vanquis Bank is the greatest driver of growth, it is appropriate that our return metrics are fully reflective of this.

“Accordingly, our target is to deliver a return on assets of approximately 10 per cent for the group as a whole which is consistent with a target return on equity of between 20 per cent - 25 per cent, by 2021 and beyond.

“We will also target sustainable receivables growth of between 5 per cent and 10 per cent per annum which we expect to achieve over the medium term, maintaining dividend cover of at least 1.4 times and a sensible buffer over the total capital requirement as prescribed by the PRA. “

The statement added: “For the avoidance of doubt, the performance targets stated above are not intended to forecast a particular level of profit and, as a consequence, it is not possible to derive a profit figure for any future period.”