Provident Financial plc is the leading non-standard lender in the UK. The group serves 2.4 million customers and its operations consist of Vanquis Bank, the Consumer Credit Division (CCD) comprising Provident and Satsuma, and Moneybarn.

Strong financial performance and dividend increase
Adjusted profit before tax1 up 14.1% to £334.1m (2015: £292.9m) and adjusted basic earnings per share1 up 9.2% to 177.5p (2015: 162.6p).
Statutory profit before tax up 25.7% to £343.9m (2015: £273.6m) and basic earnings per share up 19.8% to 181.8p (2015: 151.8p).
Return on assets2 of 15.3%, reduced from 16.1% in 2015 due to the impact of the 8% bank corporation tax surcharge on Vanquis Bank profits which became effective from 1 January 2016.
Total dividend per share up 12.1% to 134.6p (2015: 120.1p), supported by strong capital generation.
Excellent growth momentum in Vanquis Bank
Adjusted profit before tax1 up by 11.3% to £204.5m (2015: £183.7m).
Customer numbers and receivables growth of 8.7% and 13.8% respectively against continued tight credit standards.
Strong lift in fourth quarter new account bookings reflecting momentum from expanded credit card proposition.
Testing of instalment loans to credit card customers launched in November with encouraging early results.
Return on assets2 of 13.8% in 2016, reduced from 15.8% in 2015 primarily due to the bank corporation tax surcharge.
CCD delivering strong returns with Satsuma poised for profitable growth
Adjusted profit before tax1 up 9.3% to £115.2m (2015: £105.4m).
Robust demand has resulted in year-on-year receivables growth of 7.3%.
Increase in return on assets2 to 22.3% in 2016, up from 21.2% in 2015, reflecting a £12m reduction in start-up losses in Satsuma.
Cost efficient distribution now firmly established at Satsuma allowing a step-up in lending volumes of 25% in the fourth quarter.
Programme launched in home credit to migrate to a more efficient and effective field organisation structure during 2017 supported by the deployment of further technology.
Further strong growth and returns at Moneybarn
Adjusted profit before tax1 of £31.1m in 2016, 46.0% higher than 2015 profits of £21.3m.
Significant year-on-year growth in new business volumes of 28.0%.
Return on assets2 of 13.1% in 2016, up from 12.9% in 2015 due to the benefit of operational leverage.
Sound funding position and capital generation
Gearing stable at 2.3 times (2015: 2.2 times).
Funded to October 2019 following extension of core banking facilities and increase from £383m to £450m in January 2017.
Capital generated3 of £233.2m (2015: £189.9m) supporting dividends of £195.7m (2015: £174.4m) in respect of 2016.
Key financial results
     2016    2015    Change
Adjusted profit before tax1    £334.1m    £292.9m    14.1%
Statutory profit before tax    £343.9m    £273.6m    25.7%
Adjusted earnings per share1    177.5p    162.6p    9.2%
Basic earnings per share    181.8p    151.8p    19.8%
Return on assets2    15.3%    16.1%     
Final dividend per share    91.4p    80.9p    13.0%
Total dividend per share    134.6p    120.1p    12.1%

Peter Crook, Chief Executive, commented:
“I am delighted to announce adjusted earnings per share growth of 9.2% in 2016 and a 12.1% increase in the dividend for the year, supported by strong capital generation and a very robust funding position.

Vanquis Bank has reported profits up 11.3%. Growth is being delivered against continued tight credit standards and I’m particularly pleased with the momentum of new business being generated through a reinvigoration of the credit card proposition and its distribution by the new leadership team.

CCD’s profits increased by 9.3%, reflecting a robust profit performance from the repositioned Provident home credit business and a sharp reduction in the Satsuma start-up loss. The home credit business is actively pursuing plans to better serve its customers by migrating to a more efficient field organisation structure during 2017 supported by the deployment of further technology. Satsuma has made great strides in developing its online instalment loan product and it is now on course to deliver profitable growth from the attractive market opportunity available to it.

Moneybarn has again performed extremely well. Since its acquisition in August 2014, the business has more than doubled in size and maintained its margins through a period of significant investment.

The group has made a good start to 2017. Vanquis Bank and Moneybarn have continued to trade very well and the home credit business has produced a sound collections performance.”


David Stevenson/Jade Byrne, Provident Financial    01274 351900
Nick Cosgrove, Simone Selzer, Brunswick    0207 4045959
Investor Relations     
Gary Thompson/Vicki Turner, Provident Financial    01274 351900

Adjusted profit before tax in 2016 is stated before: (i) £7.5m of amortisation in respect of acquisition intangibles established as part of the acquisition of Moneybarn in August 2014 (2015: £7.5m) – see note 6; and (ii) a net exceptional credit of £17.3m comprising an exceptional gain of £20.2m in respect of Vanquis Bank’s interest in Visa Europe following completion of Visa Inc.’s acquisition of Visa Europe on 21 June 2016 and an exceptional impairment charge of £2.9m in respect of glo’s IT platform within CCD following the decision to develop guarantor loans as part of the wider Vanquis Bank loans proposition on a separate IT platform (2015: exceptional cost of £11.8m in respect of a business restructuring in CCD) – see note 2.
Adjusted profit before interest after tax as a percentage of average receivables.
Represents net cash generated from operating activities, after adding back 80% of the growth in receivables funded by borrowings, less net cash used in investing activities.