Provident Financial plc (“the Group” or “PFG”) provides the following update on the Consumer Credit Division (“CCD”) Scheme of Arrangement (“the Scheme”), following the judgement handed down on the Amigo scheme.


Malcolm Le May, Chief Executive Officer, commented: 

“To help customers fully understand the Scheme, we have appointed a customer advocate to answer customer queries, obtained an independent valuation report into CCD, and are today providing customers with an update explaining the closure of CCD and strengthening the explanation of the Scheme. Since the Scheme was announced, CCD has been put into managed run-off, a process which is expected to conclude in 2022. As previously stated, if the Scheme is not approved by the creditors or the Court, the CCD companies are highly likely to commence insolvency proceedings, in which case customers will receive no redress payments. We therefore continue to believe that the Scheme is fair and in the best interests of CCD customers.”


Scheme of Arrangement update

On 15 March 2021, PFG notified the market of its intention to launch a Scheme of Arrangement in response to the rising cost of CCD customer complaints based on historic lending. Today PFG has updated the Scheme creditors, taking into account the judgement handed down in relation to the Amigo scheme. The key updates being announced to the Scheme’s creditors are:

  • Jon Yorke has been appointed as customer advocate in respect of the Scheme. He will respond to customers' questions about the Scheme, attend the Scheme Meeting, and provide a report to the Court on his findings. The customer advocate has hired McCarthy Denning, a law firm, to provide advice through him to any customers who require it; and
  • The Scheme will be amended so that if CCD generates surplus cash between the Scheme becoming effective and completion of the wind-down of CCD, that surplus will also be paid to creditors with valid claims under the Scheme. However, PFG believes it is highly unlikely that there will be any surplus cash resulting from the wind-down of CCD.


In addition to these actions, PFG has appointed Ernst and Young LLP (EY) to undertake an independent valuation assessment of CCD. The assessment undertaken by EY further supports PFG’s position that CCD has no value and that if the Scheme is not endorsed by the Court, it is highly likely that the CCD companies would commence insolvency proceedings and CCD would not be in a position to make any compensation payments to customers.

PFG is under no legal duty to fund the CCD companies, and has to act in the best interests of all its stakeholders. PFG believes it is right to support customers, employees and other stakeholders in CCD through the managed wind-down of the business and the Scheme, and that it should contribute £50 million to the Scheme and cover the related costs (but no more). This needs to be seen in the context of PFG having made a net contribution of approximately £450 million to CCD between 2007 and 2020 (including provision of £65 million for the Scheme) and of the ongoing losses for the division.

As a result of the additional extensive communication plans PFG has put in place to explain the Scheme to CCD customers, and the extended duration of the Scheme process, Scheme costs are expected to be approximately £20 million, £5 million higher than originally announced.

PFG will continue to communicate and encourage creditors to vote. Part of the increased administration cost of the Scheme has been to achieve a high voter turnout, which PFG feels is important for the Scheme. The increase in Scheme administration costs, as previously stated, will be met by PFG, and will not reduce the £50 million allocated for customer redress.


CCD Managed run-off update

CCD was put into managed run-off on 10 May 2021 and is going to plan. PFG received one potential offer for CCD but this offer was only to wind up the division. PFG rejected the offer as it was less attractive financially than managing the run-off of the division itself. CCD has applied to rescind its permission to issue loans and the FCA has accepted this application, which means PPC can no longer issue loans. CCD is also continuing with its consultation process for colleagues. As CCD continues to collect out its loan book, colleagues will be leaving the division from July onwards, with the plan to close CCD by 2022.




Analysts and shareholders:


Owen Jones, Group Head of Investor Relations

07341 007842





Richard King, Provident Financial

07919 866876

Nick Cosgrove/Simone Selzer, Brunswick

0207 4045959