Provident Financial plc, the leading UK non-standard lender, makes the following update on trading for the financial year ended 31 December 2014, ahead of its preliminary results for the year which will be announced on 24 February 2015.

Group results 

The group expects to report results for 2014 in line with market expectations*.

Vanquis Bank

Vanquis Bank continued to deliver strong growth and robust margins through the fourth quarter of the year. The customer acquisition programme generated bookings of 430,000 for 2014, up from 411,000 in 2013, and UK customer numbers ended the year at 1,293,000, 17.7% higher than the previous year. The growth in customer numbers and credit line increases to established customers combined to produce average receivables growth for the year of approximately 31%.

Underwriting criteria have remained unchanged, delinquency levels have been stable and the annualised risk-adjusted margin for 2014 of around 33% is consistent with September 2014.

The cost of the pilot credit card operation in Poland is expected to be approximately £10m for 2014.

Consumer Credit Division (CCD)

Sales and collections performance through the seasonal peak were very satisfactory, benefitting from the progressive improvement in credit quality during the year together with the successful rebranding of the home credit business under a single Provident brand and associated marketing activity.

CCD is expected to report profits for the year in line with 2013 as a result of strong execution against the programme of work to transition the home credit business to a smaller but leaner, better-quality, modern business focussed on returns. As planned, the reduction in customer numbers and receivables of 29% and 20% respectively was fully mitigated by a significant strengthening in the risk-adjusted margin to approximately 69% as well as cost reductions. The risk-adjusted margin is some 10% higher than 2013 through a combination of a sharp improvement in collections performance and an increase in the revenue yield.

Demand for Satsuma online loans was strong during the fourth quarter, benefitting from a step-up in advertising and an increase in lead conversion rates following the further development of the decision engine and scorecard. Year-end customer numbers and receivables were 21,000 and £5m respectively.


Since its acquisition in August, Moneybarn’s new business volumes have seen a significant lift through the business having access to the group’s funding lines. This has also reinforced the primacy of its proposition across the broker network. The business has performed well, in line with the plans established immediately following acquisition.

Exceptional items

There will be exceptional costs of approximately £7m in 2014 comprising the £4m charge relating to the redundancy costs of 225 field administration employees in CCD previously announced in 2014 and £3m of acquisition-related costs associated with Moneybarn.


The group’s funding position remains strong. The group has recently exercised its option to extend the £382.5m syndicated bank facility by twelve months to May 2018. The headroom on the group’s committed debt facilities at 31 December 2014 amounted to approximately £112m which, together with the retail deposit programme at Vanquis Bank, is now sufficient to fund maturities and projected growth until May 2018. 

Commenting on the final quarter of the year, Peter Crook, Chief Executive, said:

“I am pleased that the group is expected to report 2014 results in line with market expectations. 

Vanquis Bank and CCD have both traded well through the final quarter of the year and Moneybarn has made a very good start under the group’s ownership. Our funding position remains strong.”

* Market expectations in this announcement represent a consensus 2014 group profit before tax, amortisation of acquisition intangibles and exceptional costs of £232m based on the average of forecasts published by 14 equity research analysts.


David Stevenson, Provident Financial    01274 351351
Nick Cosgrove/Simone Selzer, Brunswick    020 7404 5959

Investor Relations
Gary Thompson, Provident Financial      01274 351351