Provident Financial says 2006 trading as expected

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

The doorstep lender which said last month that its chief executive would step down ahead of a planned demerger of its international unit said it was making good progress with the proposed split. Full details are due in March.

Provident's core UK home credit business, where it ended a three year decline in numbers this summer, saw an increase of 0.5 percent in customers in the 11 months to the end of November, it said, thanks to marketing investment in new sales channels like direct mail and the Internet.

But it continued to suffer from the consumer downturn.

"The continuing pressure on the disposable incomes of consumers in UK Home Credit's target market has seen impairment charges increase at a faster rate than revenue, consistent with the trend reported in the first half of the year," it said in Monday's statement.

Provident specialises in doorstep lending, in which its agents provide short term loans and call on the borrower at home each week to collect repayments, so it has been exposed to a downturn in spending.

Provident's home credit businesses abroad, which are focussed on central and eastern Europe, also met expectations, with customer numbers up 3 percent year on year at the end of November, the lender said, with lending restarting in Hungary earlier this month after a temporary suspension in October.

Provident confirmed credit card unit Vanquis Bank, launched in 2004, was expected to report a loss in 2006, which it said would be "slightly greater" than guidance issued in September, before reaching breakeven next year.