Provident Financial plc (“the Group” or “PFG”) provides the following update on the Consumer Credit Division (“CCD”) Scheme of Arrangement (“the Scheme”), following the Group's receipt of a letter from the Financial Conduct Authority (FCA).

PFG has engaged constructively with the FCA prior to and since the market was notified of the intention to launch the Scheme for CCD on 15 March 2021. The Scheme is being proposed in response to the rising cost of customer complaints in CCD for historic lending as a result of industry dynamics which have changed the operating environment for CCD materially. PFG believes the Scheme is fair and in the best interests of CCD customers.


PFG received a letter last night from the FCA, dated 13 July, which stated:

“The FCA has assessed the Scheme by reference to the FCA's statutory objectives and has concluded that the Scheme is inconsistent with the FCA's rules, principles and objectives. Therefore, the FCA does not support the Scheme and has summarised the serious concerns it has regarding the Scheme in this letter.

However, in this case the FCA has decided not to appear in Court to oppose the sanction of the Scheme as a matter of company law. The FCA's assessment of the Scheme against its statutory objectives is a distinct, and necessarily broader, assessment than whether the Court will sanction the Scheme as a matter of company law. In this case, the FCA's decision not to oppose in Court is based on two key factors:

1.       The Lenders face an imminent insolvency in which many Redress Creditors would receive less than under the Scheme; and

2.       The Lenders are not continuing their business and there appears to be no unfair benefit to the Group and its stakeholders at the expense of Redress Creditors.”

The full text of this letter will be published on the FCA's website and also made available on our website here.


Malcolm Le May, Chief Executive Officer, commented:

“Although the FCA has confirmed it does not support the Scheme and has summarised a number of concerns, I am pleased that the FCA has decided not to appear in Court to oppose the sanction of the Scheme. We continue to believe that the Scheme is fair and in the best interests of CCD customers. As I have said previously, we are committed to delivering the Scheme successfully and the FCA deciding to not oppose the sanction of the Scheme in Court takes us one step closer to being able to do just that. The next step in the Scheme process is the creditors’ meeting on 19 July and, if approved at that meeting, the Court sanction hearing on 30 July.”


PFG believes the confirmation from the FCA that it is not going appear in Court to oppose the sanction of the Scheme is the right decision for CCD’s customers. Without the Scheme, CCD customers are highly likely to receive no redress payments, as it is highly likely that the CCD subsidiaries would commence insolvency proceedings and would therefore not be in a position to make any compensation payments to customers.


The Scheme requires more than 50% of all creditors by number who vote on the Scheme to vote in favour, and the total value of their claims to represent at least 75% of the value of the claims of all creditors who vote. The result of the combined creditors' vote will be announced as soon as possible following the creditors’ meeting.

Assuming the vote is passed by the statutory majority at the creditor meeting, the Scheme will be considered by the High Court at the sanction hearing on 30 July 2021, where the Court will either approve the Scheme or not. The judgment from the sanction hearing may be handed down either on the day of the hearing or a number of days later. The result will be announced as soon as possible after the judgment is received.

Since 10 May, when CCD was put into managed run-off its receivables book has reduced to £42m as at the end of June, and over 1,000 colleagues have now left the business. PFG’s view remains that the Scheme and managed run-off is the best outcome for customers and its stakeholders and will present that case to the Court.

If the Scheme is approved by a vote of the Scheme creditors and the judgment of the Court, the Scheme is expected to become fully effective in August this year and customers with valid claims are expected to receive compensation by late 2022. If the Court were to reject the Scheme, PFG intends to withdraw financial support for the CCD subsidiaries and the CCD subsidiaries would then be expected to commence insolvency proceedings, in which case customers would receive no compensation.






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