Lender Provident Financial reported swelling losses today as costs ballooned for the wind-down of its doorstep lending unit..
Provident said statutory pretax loss totalled £44.2m in the six months ending 30 June, compared to £28.1m the previous year.
Away from its consumer credit division (CCD) however Provident saw adjusted profit jump a hefty from £4.9m in 2020 to £63.5m.
The company’s decision to run-off the unit came in response to the changing industry and regulatory dynamics. Provident Financial said it expected wind-down costs or the potential sale at the time to reach £100m.
Cheif exec Malcolm Le May said: “I am pleased that the proposed Scheme of Arrangement for CCD was sanctioned by the High Court on 4 August. We can now continue to move forwards with our plans to close the business before paying customer redress claims during 2022.”
In May, the Bradford-based business said it was withdrawing from the home credit market after 141 years following losses in 2020 and complaints against it.
On 19 July the CCD scheme was put to a vote at a creditors’ meeting, which saw more than 50 per cent of creditors approve the scheme for it to be heard at High Court.
Provident’s decision also came as rival sub-prime lender Amigo came into trouble in May when a High Court judge refused to approve a compensation scheme that capped payouts for historical complaints.