28th Jul 2023 09:33
(Alliance News) - Vanquis Banking Group PLC shares dropped on Friday, after it reported that it swung to an interim loss.
Shares in the Bradford, England-based lender were down 26% to 133.30 pence each in London on Friday morning.
Vanquis reported that in the six months ended June 30 it swung to a pretax loss of GBP14.5 million from a profit of GBP37.3 million a year earlier.
Vanquis said that this reflects primarily the IFRS 9 impact of strong loan book growth, together with unplanned inflation driving higher costs. Meanwhile, impairment charges more than doubled to GBP85.6 million from GBP38.5 million.
Total income fell by 1.3% to GBP237.1 million from GBP240.3 million.
At 30 June 2023, the company's common equity tier 1 ratio was 21.7%, compared to 27.3% a year ago.
On the back of the results, Vanquis announced an interim dividend of 5.0 pence, unchanged year-on-year. It said that this reflects the board's confidence in its outlook.
Vanquis added that it will "continue to focus on disciplined receivables growth whilst maintaining asset quality by focusing on risk-adjusted returns."
Chief Executive Officer Malcolm Le May said: "The group performed well during the first six months of 2023. We maintained our focus on disciplined receivables growth amid uncertain macroeconomic conditions, tight cost controls given persistently high inflation, and continued business investment to establish an operating platform for the future."
By Sophie Rose, Alliance News reporter
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