Provident Financial's profit tumbles

The company, which provides credit to people who do not meet the loan criteria of mainstream banks, billed the reorganisation as a way to create a more efficient and effective home credit business. But it has found it harder than expected to recruit debt collection agents, hitting the business.

Chief Executive Peter Crook said he was confident of working through the shortage, and added the business had not seen

any change at all in the underlying demand, usage or repayment of credit.

The Bank of England this month ordered banks to apply credit rules prudently and prove by September they are not being too complacent about risks to their balance sheets, amid concerns a jump in consumer borrowing could be unsustainable.

Mr Crook said that while there had been big growth in credit card debt, for example, a lot of that was fuelled by zero per cent balance transfer offers.

“Some of the debt being put onto credit cards is being consolidated from other places, so I’m not so sure the overall rate of growth is quite as high as it seems,” he said.

Provident, which operates Vanquis Bank and consumer credit brands including Satsuma, Provident and glo and Moneybarn, said pre-tax profit fell to £115.3m in the six months to June 30.

Home credit receivables ended the first half at £471.7m, down £18.3m from June 2016, it added, with customer numbers down 11.1 per cent to 731,000.