4th May 2021 10:49
(Alliance News) - Provident Financial PLC on Tuesday confirmed that the review of its Consumer Credit division is nearing completion, following a newspaper report that the review includes the potential wind-up of its home credit unit and online lending business Satsuma.
Over the weekend, The Mail on Sunday reported Provident would close its its doorstep lending business, as well as Satsuma, leaving Provident to focus on its credit card business, Vanquis Bank, and its car finance operation, Moneybarn.
In March, the Bradford-based sub-prime lender warned that the Consumer Credit division faces liquidation unless a deal could be agreed to pay off increasing complaints.
Provident said in March: "If approved, a scheme will bring certainty for stakeholders and ensure that customers with a legitimate claim get fair access to redress payments. The group will fund legitimate scheme claims with GBP50 million and will cover further scheme related costs estimated at approximately GBP15 million. The total commitment would be met out of PFG's existing resources."
The company said customer complaint payments were about GBP25 million in the second half of 2020. On top of this, the unit processed balance reductions for home credit customers of about GBP11 million during the same period.
"If the scheme is not approved, it is likely that CCD will be placed into administration or liquidation. If this were to happen, CCD customers would not be expected to receive any redress payment," Provident added at the time.
Provident will announce the outcome of the review alongside its annual results, which will be published on Monday next week.
Shares in Provident Financial were down 4.0% at 234.93 pence on Tuesday in London, the worst performer in the FTSE 250 index.
By Dayo Laniyan; [email protected]
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