Provident Financial share price up as lender announces boost to profits for year ended December 2015

Hayley Kirton
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"The group has made a good start to 2016" (Source: Getty)

Share price in Provident Financial rose this morning as the company announced a boost to its profits for the year ended December 2015.

The lender, which has over 2m customers, reported statutory profits before tax of £273.6m, up 21.8 per cent compared with £224.6m the year before.

Shares rose after the results were announced, trading up 2.8 per cent at 3,289p shortly after 11:30am London time.

Car loan company Moneybarn, which Provident purchased in 2014, also reported positive profits for the year, with adjusted profits before tax of £21.3m for 2015, up 42 per cent from pro forma profits of £15m the year before.

Subsidiary Vanquis Bank, which provides credit cards for those with a less-than-perfect credit history, also performed well, with profits before tax of £185.5m, up 22.8 per cent compared with £151m in 2014.

"The group has made a good start to 2016," added Peter Crook, chief executive of Provident Financial. "Vanquis Bank and Moneybarn have continued to trade strongly and the home credit business has enjoyed a very satisfactory collections performance."

However, Mike van Dulken, head of research at Accendo Markets, suggested that the company may want to approach the future with caution, remarking: "After doing an increasing volume of business while rates are at artificial lows, and with a generation now seeing an interest rate rise - or indeed anything other rates near zero – as an alien concept, what will happen when the Bank of England eventually starts to hike and normalise?"

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