Provident business volumes fall as lending standards tighten

Specialist subprime lender, Provident Financial has announced its latest financial results. The company has tightened its lending standards in the wake of the pandemic crisis, leading to a fall in customer numbers.

New customer business via the Vanquis Bank division in the four months through April has fallen by about 75%, while a credit line increase programme had been temporarily paused.

About 3% of Vanquis customers had been granted payment holidays and the company said that may trend to a moderately higher level by the end of July, when a three-month holiday period ends.

In the Moneybarn division, the level of payment holidays was around 22% of customers.

New business volumes in car finance specialist Moneybarn fell significantly in April, before starting to recover in May. New business volumes had slipped about 20% year-to-date at the end of April.

Malcolm Le May, Group Chief Executive at Provident said “During these challenging times, the Group has adapted quickly and efficiently. Our priority has been to keep supporting the financial needs of our customers, whilst safeguarding our colleagues, by implementing new lending and collecting practices, the results of which have been encouraging. I would like to thank my colleagues for their perseverance and hard work over recent weeks in continuing to support our customers.”

“Our capital and liquidity positions remain extremely strong. We believe we have the strongest and most diverse funding options in our sector, a key competitive advantage for us.”

“Despite 2020 being a difficult and unprecedented year, the combination of our customer offering, together with our robust balance sheet, mean that I remain confident in the group’s ability to become a broader banking group for the financially underserved population, whilst generating attractive returns for our shareholders over the medium-term.”