Provident Financial to maintain cautious stance

23rd Oct 2009 07:35

Sub-prime lender Provident Financial expects no material improvement in the rate of increase in unemployment until next Spring and will maintain a cautious approach to new lending will remain in place at least until then.The group, which specialises in door-to-door lending, said it deliberately slowed the rate of new customer growth during 2009 by being more selective in lending to new customers and by tightening the underwriting standards applied to existing customers. Customer numbers are currently around 4% higher than at the same point in 2008. Credit card arm Vanquis's customer numbers are approximately 5% higher than at the same point in 2008 after the closure of 21,000 inactive accounts during the summer. Only around 17% of card applications are currently being accepted, it added. "We have maintained a consistently cautious approach to both new lending and balance sheet funding throughout the economic downturn. As we enter the peak trading period, we are well placed to deliver further profitable growth for 2009. Once conditions in the employment market stabilise, the group has an enhanced opportunity to generate value from its strategy to broaden its participation in the UK non-standard consumer lending market," chief executive Peter Crook said. The good performance of lending made through the downturn and the sound overall condition of the receivables portfolios leaves both businesses well positioned for the peak trading period and to deliver further profitable growth for the year.