24th Feb 2015 07:46
LONDON (Alliance News) - Provident Financial PLC Tuesday said it has made a "good start" in the first two months of its new financial year as it reported a 24% jump in annual pretax profit, driven by the performance of Vanquis Bank.
In a statement, the lender said it made a GBP224.6 million pretax profit in 2014, compared with GBP182.4 million in the prior year.
"Vanquis Bank has produced another excellent performance with UK profits up 32.8% [to GBP151.0 million]. Against unchanged credit standards, the business has continued to generate strong customer growth and margins through developing the under-served non-standard credit card market," Chief Executive Peter Crook said in a statement.
However, the group said it has decided to withdraw from a pilot credit-card operation in Poland, saying it would take too long to develop a business that could achieve the desired returns. The process of winding down the Polish operation, which includes running off the receivables book in an orderly manner, is underway, Provident Financial said.
The losses associated with the pilot in 2014 were GBP10.6 million, compared with GBP7.6 million in the prior year, and Provident Financial said it doesn't expect a "material" cost from winding down the pilot operation in 2015.
Crook also said the group's consumer credit division made good on its aim to at least maintain profits at 2013 levels. On an adjusted basis, which strips out a GBP3.4 million restructuring cost, the consumer credit division reported a GBP103.9 million pretax profit, compared with GBP102.5 million in the prior year.
"The repositioning of the home credit business as a smaller but leaner, better-quality, more modern business focused on returns is substantially complete whilst the Satsuma online instalment lending business has made a very encouraging start following its launch in November 2013," Crook added.
In addition, Crook said, the integration of the Moneybarn, which provides secured car finance to non-standard customers in the UK, is going "extremely well", with a "significant uplift" in new business volumes aided by the group's funding lines. Moneybarn was acquired for GBP120.0 million in August last year.
"Vanquis Bank and Moneybarn continue to trade strongly and the home credit business has enjoyed a strong collections performance," Crook said.
Provident Financial increased its dividend for the year to 98.0 pence per share from 85.0 pence paid for 2013.
By Samuel Agini; [email protected]; @samuelagini
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