Improved economic environment boosts Provident results

22nd October 2021

Provident Financial Group has said customer demand had picked up to pre-pandemic levels in the three months to the end of September 2021.

The business, which has published a trading update, attributes the improvement of customer demand to more favourable macroeconomic conditions.

Provident says that in its credit card and personal loans business, expenditure levels per customer increased by approximately 20% year-on-year at the end of September and by approximately 5% versus September 2019.

The Group’s vehicle finance business continued to experience a buoyant second-hand vehicle market during the third quarter and arrears trends were favourable.

Credit issued grew by approximately 3% year-on-year, but new business volumes were lower as quarter three 2020 benefitted significantly from Covid-19 related demand dynamics.

The planned closure of Provident’s CCD (Consumer Credit Division) continued to progress in line with expectations during the period.

Malcolm Le May, Chief Executive Officer, said “The Group remains conservatively positioned for any changes to the UK unemployment rate which occur as a result of job support schemes closing at the end of September.”

“The early indication from our analysis of customer data is that the end of furlough is likely to have a lower impact on unemployment than previously thought.”

“As such, the Board will review the Group’s coverage levels at the year end with a view to making provision releases, if appropriate, which will reflect the unwind of our macroeconomic provisions taken during the pandemic. Over the last 18 months, we have supported our customers throughout a difficult period whilst focusing on several important strategic initiatives.”

“The Board and I remain focused on establishing PFG as the specialist bank for the underserved operating in the mid-cost segment of the market, at present built on our three core products, and delivering growth and sustainable returns to our shareholders over the medium-term.”