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Provident Financial feels more pain in home credit unit

StockMarketWire.com

Sub-prime lender Provident Financial said the performance at its home credit unit had been hurt in the third quarter as it enacts a restructure plan.

In a trading statement for the period between 1 July and 18 October, the company said the business's collections performance remained about 10% below historic levels.

Performance management of the company's sales force had been restricted by the implementation phase of the recovery plan, Provident said.

The plan, however, was 'substantially completed', with an authorisation process by the Financial Conduct Authority expected to be wrapped up during the fourth quarter.

Provident Financial's profits have been hit by that business's poor performance plus an FCA probe into lending practices at its Vanquis Bank and Moneybarn businesses.

Vanquis Bank delivered 'good growth' in the third quarter, notwithstanding that credit standards had been tightened over the last 18 months, and was on-track to deliver full-year profits in line with internal plans, Provident said.

Moneybarn had delivered 'strong new business volumes' and a stable delinquency performance against underwriting standards that had been tightened significantly over the last 18 months.

'I am pleased to report further good progress against the 2018 goals we set out at the start of the year,' chief executive Malcolm Le May said.

'The repayment option plan refund programme is progressing well and should be substantially completed in early 2019 and the dialogue with the FCA on their investigation at Moneybarn continues in a constructive manner.'

'The growth and operating performance of Vanquis Bank and Moneybarn are both good and in line with management's plans.'

'The home credit business is still experiencing the drag on collections performance from those customers who were active during the poorly executed migration to the new operating model in the third quarter of 2017.'



Story provided by StockMarketWire.com