25th Mar 2014 12:59
LONDON (Alliance News) - Home credit and motor finance lender S&U PLC Tuesday reported a 21% increase in annual pretax profit, boosted by its motor finance lender, Advantage Finance, while it is also considering an application for a deposit-taking licence.
Pretax profit rose to GBP17.3 million for 2013 from GBP14.2 million in 2012, as revenue increased by 11% to GBP60.8 million and administrative expenses grew by 6.1% to GBP23.1 million. Advantage Finance made a GBP11.5 million pretax profit, driven by the UK's economic recovery.
However, the home credit division, Loansathome4U made a lower pretax profit than in 2012, falling by GBP300,000 to GBP5.8 million, which S&U said was a "creditable result" given lower levels of consumer confidence in the first three quarters of the year.
S&U increased its full-year dividend to 54 pence from 46 pence.
Although S&U has historically funded its business through equity and bank debt, Chairman Anthony Coombs said the lender has been considering other funding options, including corporate retail bonds and obtaining a deposit-taking licence.
"I can report we have been in constructive discussions with the Prudential Regulation Authority and the Financial Conduct Authority regarding a possible application for a deposit-taking licence," Coombs said in a statement.
"Should we make an application and a licence be granted, the group would have further scope to expand its lending organically, and into related areas of consumer and business finance," Coombs added.
UK lawmakers have been working to increase competition in the banking sector in order to improve conditions for consumers and businesses.
Chancellor of the Exchequer George Osborne's 2014 budget, unveiled last week, reported that 25 applicants are currently seeking a banking licence compared with only six in March 2013.
S&U shares were Tuesday quoted at 1,900.00 pence, up 2.9%.
By Samuel Agini; [email protected]; @samuelagini
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