Interim results for the six months ended 30 June 2009


Provident Financial plc ("Provident Financial") is the market-leading provider of home credit in the UK and Ireland, with a successful, developing credit card business. Its primary operations consist of the Consumer Credit Division, comprising Home Credit and Real Personal Finance, and Vanquis Bank.

Key financial results

Consumer Credit Division and Vanquis Bank:      
Customer numbers 2.1m 2.0m 5.3%
Average receivables £991.7m £851.5m 16.5%
Profit before tax £53.1m £51.3m 3.5%
Basic earnings per share 29.3p  28.2p  3.9%
Interim dividend per share 25.4p 25.4p -


  • Careful management of the balance between growth, impairment and costs, generating profit before tax up by 3.5% to £53.1m (2008: £51.3m).
  • Basic earnings per share up 3.9% to 29.3p (2008: 28.2p).
  • Balance sheet strength maintained with headroom on committed funding facilities of £280m and surplus capital of £60m.
Consumer Credit Division
  • Cautious approach to new lending with customer numbers up by 3.9% from June 2008.
  • Impairment stable at 31.2% of revenue (2008: 30.4%) assisted by investment in field collections and arrears management capacity.
  • Divisional profit before tax up 3.6% to £52.0m (2008: £50.2m).
  • Roll-out of Real Personal Finance scheduled for 2010, assuming market conditions have stabilised.
Vanquis Bank
  • Profit before tax up 67% to £5.0m (2008: £3.0m).
  • Risk-adjusted margin* of 30% in line with target reflecting effective management of revenue yield and impairment.
  • New customer growth slowed to 11.2% following further tightening of the criteria applied to underwriting card applications.
  • Average net receivables up 34.8% assisted by the success of the credit line increase programme directed at developing established customers.

* Revenue less impairment as a proportion of average receivables for the 12 months ended 30 June

Peter Crook, Chief Executive of Provident Financial, commented:

“These are good first half results, in line with our internal plans which anticipated the pressure of rising unemployment and reduced working hours on household budgets.

We have been increasingly selective in the granting of new credit for two years now, having held the view that the UK economy would experience a marked deterioration. We have also invested in improving the quality of credit decisioning and in the collections and arrears management operations. These measures have allowed us to maintain an appropriate balance between growth, credit quality and collections capacity, which is fundamental to the success of any lending business, and has reinforced our responsible lending policy.

We do not anticipate any material change in market conditions in the second half of 2009 and we will maintain our cautious approach to new lending. The group’s balance sheet and funding profile remain strong, with committed facilities providing £280m of headroom at the half year. Despite the challenging environment, the group expects to deliver continuing quality growth for the full year.”

Enquiries: Today Thereafter
David Stevenson, Provident Financial 020 7404 5959 01274 731111
Nigel Prideaux, Brunswick 020 7404 5959 020 7404 5959
Investor Relations    
Stuart Caldwell, Provident Financial 020 7404 5959 01274 731111