Malcolm Le May chief executive of Provident Financial
(Picture: Provident Financial )Specialist lender Provident Financial, has reported significantly improved results in what the company described as a “strategically important year” .
The business, which operates the Vanquis and Sunflower loan brands, reported a pre-tax profit of £4.1 million for 2021, compared to a £113.5 million loss in 2020. However, revenue was £389.5 million — down from £472.4 million the prior year.
Provident is best known as a doorstep lender but it exited the short-term credit market last year following a mis-selling crisis. It now concentrates on providing “mid-cost credit” products.
Provident said it closed consumer credit division that housed Provident Home Credit and some business for online brand Satsuma “in response to changing industry dynamics”.
Malcolm Le May, chief executive at Provident, said: “I am pleased to report that the group’s financial performance in 2021 improved significantly year-on-year. Most importantly, we achieved all of this whilst maintaining a focus on providing our customers with the credit products they need.
“We have exited high-cost short-term credit and we are now focused on providing mid-cost credit products to over 1.6 million customers.”
Provident’s credit card business reported adjusted pre-tax profit for the year of £173.9 million, up from £39.5 million, with its vehicle finance business achieving a pre-tax profit of £28.9 million, a jump from £10.9 million.
However, the credit card division recorded a drop in revenue, which the company put down to less consumer spending due to periods of coronavirus restrictions.
Exit from the subprime lending market followed a policy mis-selling scandal. Last year, Provident said it would pay only £50 million to meet claims of mis-selling to borrowers who were sold unaffordable loans under the Provident, Satsuma, Glo and Greenwood Personal Credit brands.
The High Court agreed to the scheme after Provident warned full payments would force it to go bust leaving many victims with nothing.
Le May said that “reflecting the improved performance of the group” the board of Provident had proposed a dividend of 12p per share from the full year results.
