Newly rebranded Vanquis hails a year of progress as the former doorstep lender’s profits fall but demand for loans, auto financing and credit cards rises
- Formerly Provident Financial, it closed its lending branch in 2021
- Pre-tax profit fell 25% to £127m, but total receivables rose 13% to £1.9bn
- Higher costs and losses from the burgeoning personal lending business weighed on earnings
Vanquis Banking Group, formerly known as Provident Financial, hailed a “year of significant strategic change and progress” as it posted lower earnings for 2022.
The lender, which just this month rebranded as Vanquis in a bid to shake off its legacy of door-to-door lending, is now targeting on credit cards, auto loans and personal loans.
It told investors Friday that higher costs related to the turnaround and increased losses from the burgeoning personal lending business had hurt earnings, but all three divisions saw strong growth last year.
Vanquis said the positive momentum from late last year had continued into early 2023, especially in its auto finance and personal loan businesses
Adjusted pre-tax profit from continuing operations fell 25 percent to £127 million last year.
But total receivables rose 13 per cent to £1.9 billion, with credit cards up 11 per cent and car loans up 10 per cent.
The personal loans division saw pre-tax losses reach £15.7m, up from £8.7m in 2021, as the company put money into growing the business and its IT platform.
However, it continued to attract new customers, adding an extra 14,000 on the previous year, with total receivables of around £76m, up from £28m in 2021, the company said.
Formerly known as ‘The Provvy’, the group was known for visiting homes in poorer areas to arrange money loans, but was criticized for high interest rates.
In 2021, it said it would close its doorstep lending after being dogged by mounting complaints and a city watchdog investigation.
Chief Executive, Malcolm Le May, said: “We have made significant progress since I took over as CEO in February 2018 and 2022 has been another significant year of strategic development for the group.
“We have strengthened our repositioning as a leading specialist banking group in the mid-cost and near-prime parts of the credit market with a focus on lower-risk clients, resulting in a significant reduction in credit risk across the group since 2019.
“The process of returning the Group’s loan portfolios to pre-pandemic levels is underway, as evidenced by the excellent growth and momentum we delivered in the fourth quarter of 2022.”
Vanquis said the positive momentum from late last year had continued into early 2023, especially within the auto finance and personal loan businesses.
Thanks to strong trading, the group announced a final dividend of 10.3 pence per share, bringing the total annual dividend to 15.3 pence, up 28 percent from 12.0 pence the year before.
Vanquis shares rose 1.3 percent to 235.3 pence on Friday afternoon.