Provident Financial’s profits drop

City A.M. Reporter
SUBPRIME lender Provident Financial posted lower-than expected profit for the full year as customers were more cautious in their borrowing habits, a trend which is likely to continue in 2010, it warned.

The firm, which specialises in loans to people who usually need to borrow less than £500 and pay it back in weekly instalments, posted a 2.4 per cent drop in full-year pre-tax profit of £125.7.

Market expectations had ranged between £146.7m and £156m, with the consensus at £151.45m, according to a group of 10 analysts.

“Existing customers exhibited increasingly cautious behaviour during 2009 which tempered demand for credit and was exacerbated by the adverse weather conditions during the peak trading weeks in December,” said the group in a statement.

The company previously said that it had slowed the rate of new customer growth in 2009 at its consumer credit division and that it will continue its cautious approach to lending until unemployment stabilises.

It added yesterday that it will maintain this stance throughout 2010 as it anticipates little change in employment conditions “for some time”.

The group said customer numbers grew 5.4 per cent to 2.3m in 2009.