Following a series of profit warnings last year, Provident Financial (PFG) has given with one hand and taken with the other. The disastrous execution of its restructure of the home credit business means its consumer credit division is expected to report a pre-exceptional loss of around £120m for 2017. That’s at the upper end of guidance issued in August. However, there is a glimmer of hope – active customer numbers for its consumer credit division increased by 30,000 to 530,000 during the final quarter.
But there are signs of a slowdown at former growth engine Vanquis Bank. While total customer bookings over the year were up by almost 8 per cent, these declined by around a fifth during the final quarter, compared with the same quarter a year earlier. Against an uncertain macroeconomic backdrop, underwriting standards were tightened during the third quarter, while bookings gained through its partnership with Argos plummeted from 15,000 to just 1,000. Argos has since decided to exit the deal.
At Moneybarn, receivables were up more than a quarter during the year, but higher impairments meant the risk-adjusted margin declined to 21.8 per cent by December, down from 22.7 per cent three months earlier. Both Vanquis and Moneybarn are in discussions with the Financial Conduct Authority regarding the sale of repayment option plans and customer affordability tests, respectively.
