Shares Provident Financial rose today after the subprime lender said its credit card business, Vanquis Bank, performed “modestly above expectations” in the fourth quarter.
Provident Financial led the FTSE 250 index risers on Wednesday, with shares up as much as 5.85 per cent to 446.6p by lunchtime.
The lender said its performance for the three months to 31 December was in line with internal plans, and it expects to report full-year results in line with market expectations.
The company, which provides credit to those who don’t meet the lending criteria of mainstream banks, has focused on growing its customer numbers since fending off a takeover bid by smaller rival Non-Standard Finance last year.
“I am very pleased that the group has continued to perform well in the final quarter and we expect to report full-year results in line with market expectations,” said chief executive Malcolm Le May.
“We are well placed entering 2020 to continue to meet our customers’ needs and deliver against the targets set out at our Capital Markets Day in November.”
Provident Financial’s consumer credit division (CCD) delivered results in line with plans, the company said.
CCD suffered a botched reorganisation in 2017 that led to the departure of its chief executive officer and forced a profit warning.
The lender said its car and van financing division, Moneybarn, had failed to meet internal targets due to higher impairment charges, but added that Royal Bank of Scotland investment bank Natwest Markets had agreed to provide it with funding.
Natwest Markets will provide Moneybarn with an initial £100m of funding, which is anticipated to grow to £275m over the next 18 months.
“I am also delighted to announce that we have now agreed a bilateral securitisation facility to fund Moneybarn’s business flows, further diversifying our funding sources, reducing the group’s funding costs and supporting the group’s medium-term growth ambitions,” said Le May.
Provident is due to release its preliminary results for 2019 on 27 February.