Provident says it is on track as credit quality improves

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​CREDIT lender​ Provident Financial said it has performed well over the past three months and it is on track to deliver good growth for the year as a whole.

The Bradford-based group said ​credit quality in all three ​of its businesses is “very sound” and the group’s funding position is strong​.

Provident said its credit card operation Vanquis Bank has generated further strong growth and margins through the third quarter of the year.

Investment in its customer acquisition programme generated year-on-year customer growth of 17 per cent and average receivables growth of 32 per cent.

​The company said d​elinquency levels remained favourable through the third quarter, reflecting the sound quality of ​its​ receivables book and the backdrop of an improving employment market.

This​ enabled the business to deliver an annualised risk-adjusted margin above 33​ per cent​, ahead of its minimum target of 30​ per cent​.

​The group has started a pilot credit card operation in Poland and by the end of last month, it had 50,000 customers and a receivables book of £13.4m.

​Provident’s chief executive Peter Crook said ​“excellent” momentum has been maintained through the third quarter in its ​consumer credit division as the operation becomes leaner and focused on better-quality customers.

He added that the division is on track to deliver full-year trading results in line with internal plans as it enters the important fourth quarter trading period, which covers Christmas.

​However it said that ​demand from existing home credit customers remains relatively subdued as customer confidence has not yet shown any sign of improvement despite the improvement in the wider UK economy.

“The group’s funding position remains strong and the recent acquisition of Moneybarn, together with our organic growth initiatives, represent exciting opportunities to augment the group’s medium-term growth prospects​,” said Mr Crook.

Provident bought Moneybarn, a vehicle finance group, in August which created a third division. It said it has made good progress integrating the business.

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