Provident Financial plc is the market-leading provider of home credit in the UK and Ireland, with a successful, growing credit card business. Its operations consist of the Consumer Credit Division and Vanquis Bank.

Key financial results
     H1 2011    H1 2010    Change
Customer numbers    2.4m    2.3m    5.2%
Average receivables1    £1,151.5m    £1,028.5m    12.0%
Pre-tax profit    £62.3m    £54.0m    15.4%
Basic earnings per share    34.3p    29.5p    16.3%
Interim dividend per share    26.7p    25.4p    5.1%
First half pre-tax profit up by 15.4% to £62.3m (2010: £54.0m) reflecting high quality receivables growth and favourable impairment trends.
Increase in the interim dividend of 5.1% to 26.7p (2010: 25.4p) supported by earnings growth and strong capital generation.
Strong balance sheet and liquidity with gearing ratio of 3.3 times and headroom on committed facilities of £280m, sufficient to meet contractual maturities and fund planned growth until the final quarter of 2012.
In addition, Vanquis Bank retail deposit taking programme activated in July to establish standalone funding for this growing business and further diversify the group’s funding base.
Consumer Credit Division
Home Credit pre-tax profit of £50.2m, after absorbing £2m of one-off costs in respect of the implementation of the EU Consumer Credit Directive (2010: £51.1m, including a £2m benefit from the extra trading week2).
Sound credit quality and a strong collections performance throughout the first half reduced Home Credit’s annualised rate of impairment from 32.9% of revenue at December 2010 to 31.2% at June 2011.
Continuing focus on good quality existing customers produced growth in Home Credit average receivables1 of 4.6%.
Vanquis Bank
Pre-tax profit up by 93.4% to £17.6m (2010: £9.1m).
Further strong investment in the customer acquisition programme produced 26.3% growth in the customer base and 36.3% growth in average receivables1.
Annualised risk-adjusted margin3 of 34.7%, well ahead of the 30% minimum target due to the favourable delinquency performance supported by continued application of tight underwriting standards.
Surplus distributable capital of £5.2m generated in the first half of the year and a dividend of £5.0m paid to Provident Financial plc in July.
Peter Crook, Chief Executive, commented:
“I am delighted to report earnings up by 15.4% and to announce a 5.1% increase in the interim dividend, which is strongly supported by the group’s excellent capital generation.

The group’s funding position is very robust. In this context, the activation of the retail deposit programme in Vanquis Bank not only represents further significant diversification of the group’s funding sources, but will also establish ongoing standalone financing for this growing business.

Credit quality in both businesses is very sound as evidenced by the favourable impairment trends in the first half of the year. This provides the foundation for delivering good quality growth for 2011 as a whole. There will be no change to the cautious stance on extending new credit in recognition of the continuing pressure on consumers’ real incomes and remaining uncertainty over the future direction of the employment market.”

Enquiries:    Today    Thereafter
David Stevenson, Provident Financial    020 7404 5959    01274 351351
Gill Ackers/Eilis Murphy, Brunswick    020 7404 5959    020 7404 5959
Investor Relations          
Gary Thompson, Provident Financial    020 7404 5959    01274 351351

Based on an average of month-end receivables throughout the first half of the year.
Home Credit’s 2011 financial year comprises 52 weeks with the first half of the year comprising a 26-week period. Home Credit’s 2010 financial year comprised 53 weeks with the first half of the year comprising a 27-week period.
Revenue less impairment as a percentage of average receivables for the 12 months ended 30 June.