Provident Financial has delivered good growth in its third quarter (Q3), with the company continuing to make ‘sound progress’ on delivering its operational objectives this year. But, despite its home credit business completing a recovery plan it has seen customer numbers drop from 464,000 in June to 449,000.
The sub-prime lender has also witnessed collections in the home credit unit staying at 10% below historic levels during Q3 in the wake of restructuring the business.
The company saw the performance of its door-to-door lending unit decline after it decided to replace self-employed agents that acted as debt collectors with full-time employees hired by Provident Financial directly.
‘I am pleased to report further good progress against the 2018 goals we set out at the start of the year,’ CEO Malcolm Le May said. ‘The implementation of the home credit operational recovery plan is substantially complete and the authorisation process close to conclusion.’
‘The home credit business is still experiencing the drag on collections performance from those customers who were active during the poorly executed migration to the new operating model in the third quarter of 2017,’ he added.
Elsewhere, the company has performed better, with its credit card business, Vanquis Bank, seeing good growth and on-track to hit its profit targets at the end of the financial year. The credit card unit generated revenues of £186.6 million in Q3, with its posting pre-tax profits of £206.6 million in 2017.
Meanwhile, its vehicle finance business, Moneybarn, saw business volumes year-on-year rise by 16% and its customer base increase to around 59,000, representing a 22% hike in the same period a year prior.
‘The growth and operating performance of Vanquis Bank and Moneybarn are both good and in line with management’s plans,’ Le May said.
‘The group’s funding and capital positions are strong and I believe the group is well placed to achieve its strategic aim of being the leading provider of credit to the underserved sector,’ he added.