UK’s Provident home credit collections back to pre-virus levels, 2020 on track

(Reuters) – Doorstep lender Provident Financial Plc PFG.L said on Wednesday collection performance in its home credit business has now aligned with pre-pandemic levels, with the company set to meet market expectations for this year.

“Turning now to the performance of the Group during the quarter, delinquency trends across the businesses were stable and the take-up of payment holidays continued to be lower than our initial expectations,” Chief Executive Officer Malcom Le May said.

Provident was working on returning its home credit division, which had suffered a wrongly-executed restructuring, to profit when the COVID-19 pandemic struck.

Higher impairments pushed the segment into an even wider loss for the first half in August, with customer numbers also dwindling lower.

In June, rival Non-Standard Finance Plc NSF.L, which had made an unsuccessful attempt to buy Provident last year, flagged going concern risks as the pandemic overturned people’s borrowing habits.

But Provident, which provides loans to people who do not make the cut for mainstream banks, said new business volumes picked up during the third quarter ended Sept. 30.

It added that the group was well-positioned for the traditionally busier final quarter, when people often take out loans for Christmas shopping.

The UK-listed company reported a Common Equity Tier 1 (CET1) ratio – a closely watched measure of balance sheet strength – of 36% as at September end. That was slightly higher than the 35.4% it posted in August.

To weather an expected surge in loan losses amid the global health crisis, Provident has already set aside 240 million pounds .

Reporting by Muvija M in Bengaluru; Editing by Rashmi Aich

Source Article