Provident Financial 'on track' to meet full-year forecasts

Provident Financial said it remained on track to meet full-year forecasts on Wednesday, despite the "challenging" macroeconomic backdrop.

Updating on trading, the sub-prime lender - which provides credit cards, vehicle finance and personal loans - said it had performed in line with management expectations in both the third quarter and into October.

Malcolm Le May, chief executive, acknowledged that economic conditions during the period had been "challenging", because of higher inflation and the cost of living squeeze.

But he continued: "The group’s asset quality remained high across all products. Provident’s strong focus on risk management, its rigorous underwriting processes and its strategic repositioning leaves it well placed to navigate market conditions."

He added that "notwithstanding the macroeconomic backdrop", the group was on track to meet full-year market expectations.

In the credit card business, delinquency trends remained stable during the quarter and the receivables book grew by around 5%. Receivables at the vehicle finance business were 3% higher than the first half as at 30 September, while its recently launched personal loans unit reported receivables of more than £50m for the first time.

Provident closed its consumer credit business, which offered high-cost, short-term loans, last year, and refocused on what it terms "mid-cost" lending.

As at 0845 BST, shares in Provident were down 6% at 155.3p.

Shore Capital, which acts as joint broker to Provident, said: "Contrary to market fears, Provident continues to demonstrate resilience in a challenging economic environment reflecting the significant and ongoing improvement in the quality of the loan book and extent of provisioning already in place."