Newly rebranded Vanquis hails year of progress as former doorstep lender’s profit falls but demand for loans, car finance and credit cards soars
- Formerly Provident Financial, it closed its doorstep lending arm in 2021
- Pretax profit fell 25% to £127m but total receivables soared 13% to £1.9bn
- Higher costs and losses from the nascent personal loans business dented profit
Vanquis Banking Group, formerly known as Provident Financial, hailed a ‘year of important strategic change and progress’ as it posted lower profit for 2022.
The lender, which just this month rebranded as Vanquis in efforts to shrug-off its legacy of doorstep lending, now focuses on credit cards, motor finance and personal loans.
It told investors Friday that higher costs relating to its turnaround and increased losses from the nascent personal loans business had dented profit, but all three divisions saw strong growth last year.
Vanquis said the positive momentum seen at the end of last year had continued in early 2023, especially at its car finance and personal loan businesses
Adjusted pre-tax profit from continuing operations fell 25 per cent to £127million last year.
But total receivables increased 13 per cent to £1.9billion, with credit card up 11 per cent and car finance up 10 per cent.
Its personal loans division saw pre-tax losses swell to £15.7million, from £8.7million in 2021, as the company ploughed cash into growing the business and its IT platform.
However, it continued to attract new customers, adding an extra 14,000 from the previous year, with total receivables of approximately £76million, up from £28million in 2021, the company said.
Formerly known as ‘The Provvy’, the group was renowned for calling at homes in poorer areas to arrange cash loans but was criticised over high interest rates.
In 2021 it said it was closing its doorstep lending business after it was dogged by rising complaints and an investigation from the City watchdog.
Chief Executive, Malcolm Le May, said: ‘We have delivered a substantial amount of progress since I took over as CEO in February 2018 and 2022 was another important year of strategic development for the group.
‘We reinforced 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 customers, which has resulted in credit risk across the group reducing materially since 2019.
‘The process of rebuilding the Group’s loan books back to pre-pandemic levels is underway, as demonstrated by the excellent growth and momentum we delivered in the fourth quarter of 2022.’
Vanquis said the positive momentum seen at the end of last year had continued in early 2023, especially within its car finance and personal loan businesses.
On the back of strong trading, the group declared a final dividend of 10.3p per share, bringing the total annual dividend to 15.3p, up 28 per cent from 12.0p the year before.
Vanquis shares rose 1.3 per cent to 235.3p in afternoon trading on Friday.
