Provident Financial’s credit cards gain popularity while loans slide

SUB-PRIME lender Provident Financial Group saw its credit card customers increase by more than one-fifth last year, though the group’s home credit division lost clients.

The FTSE 250-listed company reported a 22.2 per cent rise in customers for its Vanquis Bank credit card in 2013, ending the year with 1.1m UK customers.

However, Provident’s consumer credit division (CCD) suffered in the fourth quarter from “very low” customer confidence due to “pressure on disposable incomes from the persistent rises in food and utility prices”, with customer numbers ending 17.3 per cent down on the previous year.

The firm said that it was using “significantly tighter credit standards” on its potential customers, keeping sales low.

Gary Greenwood, an analyst for Shore Capital, said that the different performances of Vanquis and its CCD division is down to them serving different demographics.

“Vanquis serves people who are typically in regular employment but for some reason have had problems with their credit history, whereas the people at the bottom of that spectrum [CCD customers] are very much impacted by inflationary pressures like food prices and utility bills rising,” he said.

He added that investment in mobile technology should be a priority for the company’s future.

The firm is set to book a £13m one-off cost for restructuring the CCD unit, in which 520 people lost their jobs.