Provident home credit collections return to pre-virus levels

The Bradford-based firm was working on returning its home credit division, which had suffered a wrongly-executed restructuring, to profit when the Covid-19 pandemic struck.

Higher impairments pushed the division into a wider loss for the first half in August and customer numbers were down.

Provident's chief executive, Malcom Le May, said: “Delinquency trends across the businesses were stable and the take-up of payment holidays continued to be lower than our initial expectations.”

In June, rival Non-Standard Finance, which had made an unsuccessful attempt to buy Provident last year, flagged going concern risks as the pandemic overturned people's borrowing habits.

However, Provident said new business volumes picked up during the third quarter to September 30.

he group, which provides loans to people who do not make the cut for mainstream banks said it is well positioned for the traditionally busier final quarter, when people often take out loans for Christmas shopping.

The firm reported a Common Equity Tier 1 (CET1) ratio - a closely watched measure of balance sheet strength - of 36 per cent at the end of September. That was slightly higher than the 35.4 per cent it posted in August.

To weather an expected surge in loan losses amid the global health crisis, Provident has already set aside £240m.