Provident Financial - Interim Report & Accounts 2005

Regulatory

The UK Government’s Consumer Credit Bill is progressing through the parliamentary process and is expected to become law towards the end of this year. The aim of the bill is to modernise the regulation of consumer credit and to enhance consumer protection through tighter licensing requirements and by making it easier for consumers to challenge unfair practices and terms. We welcome these proposals.

In Poland, a new law establishing a maximum interest rate of four times the Lombard rate (equivalent to LIBOR in the UK) is being introduced. The Lombard rate is currently 6% which would result in a maximum interest rate of 24%. The new law becomes effective for loans issued from February 2006. We have made preparations for this eventuality and are confident that we can continue to serve our customers without any material impact on the performance of our Polish business.

The Competition Commission inquiry into the supply of home credit in the UK continues and we have made several submissions of evidence in public and private hearings, and in writing. We have made clear that Provident Financial is a responsible lender operating in a highly competitive market with transparent products and a home service which is valued by our customers. The Commission is expected to publish its ‘emerging thinking’ document later this month or in early October and its ‘provisional findings’ report at the end of the year.

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