Provident Financial bang on the money through fourth quarter

With all its non-standard lending divisions trading well through the important fourth quarter Provident Financial said full year results would be in line with market expectations and that its funding position remained strong.

Vanquis Bank, which offers credit cards to people who are excluded by mainstream card issuers, grew customers numbers 9% to 1.5m after booking 0.4m new accounts during the year.

As a result, Vanquis grew receivables by an annual 14% and, with delinquency levels having remained strong through the fourth quarter, the annualised risk-adjusted margin for 2016 remained just above 32%.

Deposits on account at Vanquis plus the £140m group debt headroom were said to be sufficient to fund maturities and projected growth until May 2018.

The consumer credit arm, through the three Provident, Satsuma Loans and Glo brands, lifted sales in the quarter 3% year on year as demand remained robust and credit quality good.

Customer numbers ended the year flat on the half year and year-on-year receivables grew 7% and revenue yield slipped due to an increase in average loan size and duration.

This contributed to the annualised risk-adjusted margin dropping to 78% from 81% in September.

The start-up loss at digital brand Satsuma was reduced by £12m over the year as it ended the year with 55,000 customers, up from 49,000 over the quarter, and receivables at £18m up from £14m in September.

Second hand cars finance provider Moneybarn saw a moderation of demand during the seasonally quieter fourth quarter, though new business volumes still increased 7% to leave customer numbers and receivables ended the year at 41,000 and £297m, showing year-on-year growth of 32% and 35% respectively.