The name of Non-Standard Finance (NSF) suggests a market disrupter. Quite the opposite: NSF's growth strategy is to acquire traditional branch-based and doorstep lending businesses and then grow them in a traditional manner, that is by hiring agents and opening branches. Its acquisition of Everyday Loans Group from Secure Trust Bank (STB) for £107m in cash and £20m in NSF shares certainly fits into this pattern.
The Neil Woodford-backed newcomer will invest in opening more outlets for ELG's unsecured lending business. The "non-standard" element of the name of course refers to the credit quality of the customer base: people with potted credit histories who are avoided by mainstream banks. By lifting the average annual percentage rate from the 100 per cent imposed by Secure Trust, NSF hopes to hoover up customers that the bank had decided were too risky. "We are absolutely sure that we can grow this business faster than was the case under Secure Trust's ownership," says NSF's executive chairman, John van Kuffeler.