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

 
Hayley Kirton
Follow Hayley
Visa Plans Largest IPO In U.S. History
"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?"

Related articles