Provident Financial - Interim Report & Accounts 2005

Vanquis Bank

Vanquis Bank performed well in the half year to June 2005. In the first quarter, the operations infrastructure was expanded to support the full scale launch of a differentiated credit card for the non-standard UK market. This expansion enabled a successful acceleration of customer recruitment in the second quarter. At 30 June 2005, 113,000 cards were in issue, up from 76,000 at December 2004. Receivables at the half year were £42.0 million, up from £12.1 million at June 2004. Turnover was £7.2 million (June 2004 £2.0 million).

Many of the costs associated with building a credit card business, including customer acquisition and impairment charges, arise in the early stages of the customer relationship, leading to a substantial early investment in start-up losses. This is reflected in the result for the first half of 2005 which, as expected, was a loss of £7.2 million (June 2004 £4.8 million loss).