14th Mar 2025 11:00
(Alliance News) - Vanquis Banking Group PLC on Friday said 2024 marked a "pivotal year" in its turnaround as it reported weaker profit and revenue figures.
The Bradford, England-based lender reported a significant widening of its pretax loss in 2024 to GBP136.3 million from GBP12.0 million the prior year.
Its shares fell 9.0% to 49.97 pence on Friday morning in London.
Partially contributing to the decline was a 6.2% fall in total income to GBP458.5 million from GBP488.8 million, as net interest income fell 5.1% to GBP420.0 million from GBP442.6 million.
However, a GBP71.2 million goodwill write-off at its Moneybarn vehicle finance offering, coupled with a 15% increase in impairment charges to GBP191.0 million from GBP165.5 million served as the primary determinants.
The specialist bank said the write-off is not related to a recent Court of Appeal verdict in the motor finance sector. On the ongoing vehicle finance saga, where a key verdict looms, "Vanquis believes its position is differentiated on a number of grounds versus the three cases subject to the judgment", it said.
The impairment was driven by a vehicle finance receivables review. The UK Financial Conduct Authority on Tuesday said it is no longer planning a further update on its review into past use of motor finance discretionary commission arrangements in May.
The FCA intends to outline the next steps within six weeks of a Supreme Court verdict. This will include whether the FCA is proposing a redress scheme and if so, how it will take it forward. The Supreme Court is due to hear an appeal brought by car loan providers challenging an October ruling that sided with consumers.
Vanquis added: "The future application of the Court of Appeal judgment in Johnson v Firstrand Bank Ltd, Wrench v Firstrand Bank Ltd, and Hopcraft v Close Brothers Ltd, relating to motor finance commission disclosure practices, remains highly uncertain with the Supreme Court having agreed to hear the appeal of the two lenders involved."
It added: "Vanquis believes its position is differentiated on a number of grounds versus the three cases subject to the judgment and all customers signed a pre-contractual document that confirmed a commission 'will' be paid."
The lender got rid of its dividend for 2024 as it cited a focus on deploying capital to support growth initiatives. In 2023, Vanquis declared a total dividend of 6.0p per share. It added that it intends to revisit its capital allocation framework following delivery of its strategy in 2026.
Chief Executive Ian McLaughlin commented: "2024 was a pivotal year in the turnaround of Vanquis. We have made good progress implementing the changes required to position the business for sustainable future growth, despite substantial headwinds. We addressed underlying structural issues, simplified our operating model, refreshed our strategy, expanded our product range, and are on track to deliver our technology enhancements.
"While the transformation continues, I am confident that 2024 will be remembered as the year we repositioned Vanquis for success."
By Christopher Ward, Alliance News reporter
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