Regulators lift restrictions on PCF Group banking licence

PCF Group received notification from both the Prudential Regulation Authority and the Financial Conduct Authority that the regulatory restrictions of the bank mobilisation period had been lifted on Tuesday, and it could now commence deposit-taking activities as a fully operational bank.

The AIM-traded firm said it was now adopting the trading style of PCF Bank.

It said customers could expect a range of deposit products to be available online and in best-buy publications in the “very near” future, with a typical one-year savings product set to offer interest rates of 1.7%, with the account opening process taking ten minutes as a result of the company’s technology and focus on customer service.

PCF said the milestone marked the successful completion of a three-year project, and the transformation of the group from a finance house to an authorised bank.

“It is a great testament to the team at PCF that the mobilisation process has been concluded within seven months whilst also delivering organic growth and increased profitability in the core business,” the board said in its statement.

“New business originations in the third quarter were up 20% on the corresponding quarter last year, with the quality of the loan book further improved with the introduction of prime business trials.”

Given the group's positive trading in the third quarter, the board said it now expected the group's performance for the year to 30 September to be “slightly ahead” of its previous expectations for profitability and portfolio quality.

The launch of retail deposit taking operations would coincide with a number of new business initiatives, the board added, utilising the cheaper cost of funds to expand the group's addressable lending market and thereby provide a significant increase in scale, with a target portfolio of £350m in three years and £750m in five years.

“This is the culmination of three years of hard work for everyone within the group,” said CEO Scott Maybury.

“The potential upside is considerable, as we currently have a relatively small market share and will now be able to access cheaper funding and lend into more prime segments of the market.”

Maybury said the company’s organic growth proved that the model worked, and the launch of PCF Bank would allow it to accelerate that growth over the next three to five years.

“The consumer market for used vehicles and the SME market for vehicles, plant and equipment remain robust and our credit criteria remain appropriately judged for the uncertainties of the current political and economic environment.

“PCF Bank's access to retail deposits will allow us to provide our broker network with an even wider and more competitive range of rates, and along with our new business initiatives, will ensure that when those deposits come in we are able to deploy that capital quickly and efficiently.”