Michael LenoraManaging Director
Vanquis Bank

Vanquis Bank’s ‘low and grow’ approach to customer lending and the high level of contact we have with our customers is proving successful in meeting the demand of non-standard credit card customers.


Vanquis Bank continues to bring the benefits of a credit card to people who can find themselves rejected by more mainstream lenders. Since 2003, we have operated in the non-standard market, helping people on average or below-average incomes to make simple, everyday things even easier, such as supermarket shopping or online purchases.

We are confident in a market which inherently carries more risk because of our specific and extensive experience in lending to non-standard customers. Whilst we are willing to lend to this segment, we do so cautiously and responsibly and aim to support and educate our customers, whether they are new to credit or want to repair their financial history.

This cautious approach is called ‘low and grow’. Customers start with credit limits typically as low as £250 and we then monitor performance over time to understand individual customer behaviour before granting responsible increases when it’s right to do so.

Our interest rates reflect the higher risk of default within this market segment. The majority of our customers are taken on at our representative APR of 39.9% and our default charges are in line with those of the mainstream credit card providers.

Another important factor that makes Vanquis Bank different from other lenders is the high level of contact we enjoy with our customers. Customers declined by prime issuers appreciate a ‘second chance’ from Vanquis Bank and we provide a higher level of help and support than the mainstream lenders from our two contact centres in Chatham and Bradford.


Our strategy at Vanquis Bank is to deliver sustainable growth and high returns with a minimum 30% post-tax return on equity. Sustainable growth is vital to our strategy as we continue to enhance our reputation as a responsible lender and to put the needs of our customers first.

To deliver our strategy, we continue to focus on:

  • clear credit management objectives to ensure that we continue to maintain stable levels of impairment;
  • high levels of contact with our customers through the acquisitions process and welcome call;
  • providing customers with a high-quality service, unique to our sector of the market;
  • providing customers with the appropriate credit limit and maintaining high levels of utilisation thereafter to minimise the level of contingent risk;
  • ensuring that we operate efficiently and effectively in all aspects of the customer lifecycle from new accounts to customer service, to collections, to fraud; and
  • maintaining a minimum risk-adjusted margin of 30% (annualised revenue less impairment divided by average receivables).


At Vanquis Bank we have developed a tailored approach to delivering our strategy. This comprises four key strands:

  1. Focus on our target market
    Vanquis Bank operates in the non-standard sector of the UK credit card market and some of our customers have been refused credit by mainstream lenders and would like to repair their credit rating. We estimate that 7 million of the current 10 million people in this non-standard market are the target audience for our credit card product.

    Our experience in this specialised form of credit has grown year-on-year and we have been able to tailor our products and services to suit the very particular needs of our customers. Not every lender is happy to work in the non-standard market but we enjoy taking care of our customers and providing them with high levels of service and products which genuinely meet their needs. Growth in our business is never at the expense of our customers and we continue to find new and innovative ways to deliver the credit they can afford.

  2. High customer contact
    The relationships with our customers are much closer than those in the mainstream lending market. We value our customers and continue to develop new propositions to enhance levels of contact.

    All of our customers receive a welcome call as part of the acceptance process‚ this is unique in the credit card industry. The call provides the opportunity to gather additional information which is useful to help manage their account at a later date. It is also an important element of our underwriting that we will generally turn down an application, if we cannot speak to a potential customer.

    Some of our customers are new to credit and in turn they choose to contact us more than would be expected in a standard lending relationship. In 2011, our contact centres received approximately 5.2 million calls, of which 2.7 million were answered by our contact centre staff and 2.5 million were handled by our Interactive Voice Response system. This high level of contact means that we understand their needs and can provide support to customers when they are struggling to make payments.

    We also offer a Gold Service, carrying enhanced levels of customer service, to over 150,000 of our best customers.

    High customer contact has helped us to maintain some of the best levels of customer satisfaction in the industry with 9 out of 10 customers saying they would recommend us. It is always our aim to treat customers fairly and resolve quickly any complaints that do arise. This is reflected in the fact that when complaints do get escalated to the Financial Ombudsman Service (FOS), they find in our favour over 90% of the time. Again, this is one of the best statistics in the industry.

  3. Low and grow
    Booking the majority of our accounts on a small initial credit line is at the core of our ‘low and grow’ strategy. The typical first credit line is just £250 and this allows us to observe and understand our customers’ behaviour before granting any further lending in a responsible and sustainable manner.

    Vanquis Bank has developed an unparalleled expertise in lending to the non-standard market in this way. We continue to invest in people and systems that enhance underwriting capability in both acquiring our customers and subsequently allowing credit line increases. This ‘low and grow’ approach has allowed the average credit limit of the portfolio to continue to grow to £940 (2010: £900) whilst continuing to improve underlying credit quality.

  4. Collections
    Collections are an extremely important aspect of the business and we continue to develop new and innovative collections strategies designed to help customers stay on track. Our telephone-based operations use leading- edge technology and techniques to maximise efficiency and cash collected. Our collections teams are highly trained and our ‘promise kept’ rate – the number of payments actually received from a promise given by a customer – is 70-75% which we believe is ‘best in class’. Our employees are trained to manage the accounts of customers that are identified as vulnerable and support them accordingly. Vanquis Bank also continues to develop new channels for collections activity with the introduction in 2011 of services to allow customers to pay online and via SMS.
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