Provident Financial reports strong end to 2010

"The group had a strong finish to 2010 and expects to report results slightly ahead of market expectations," said chief executive Peter Crook.

The Bradford-based company, which specialises in lending to people unable to borrow from high street banks, said the average forecast of 18 analysts was for an adjusted 2010 pre-tax profit of 141.1m with predictions ranging between 136m and 146.5m.

Provident, seeking to allay fears over the impact of Government spending cuts and welfare reforms on its business, had said in November that it had seen a pick up in home credit sales since September.

"This performance improved further through the peak trading weeks in the run up to Christmas, notwithstanding the adverse weather conditions," the company said.

The lender also said its ability to collect repayments on loans had improved in the fourth quarter having been stable in the first nine months of the year while new customer growth had moderated to one per cent due to a focus on existing customers.

As part of a drive to diversify its funding, Provident also said it had secured a 100m, 10-year loan from the Prudential/M&G Investments UK Companies Financing Fund in a deal that leaves the group's average cost of debt funding little changed at eight per cent.