Sometimes you have to put all your winnings on your fastest horse. In that spirit, consumer finance provider S&U (SUS) is selling its home credit division Loansathome4u to the Neil Woodford-backed Non-Standard Finance (NSF), the first scalp in the latter’s strategy to hoover up the non-standard lenders.
For S&U, the deal will dilute underlying earnings in the second half as proceeds and repaid debts will not match the lost profit contribution. But the sale generates a net £80m, of which £34m will be reinvested into the stronger-performing motor finance division, and £13m will be used to develop a separate lending product for small and medium-sized businesses. In both these cases, the company is pushing on an open door in terms of credit appetite.
