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Provident to launch online brand
Sub-prime lender Provident Financial revealed plans to launch a new online lending arm as it looks to stem falling borrower numbers in its hard-hit consumer credit business.
The Bradford-based doorstep lender, which offers credit to customers who struggle to borrow from mainstream players, said it was rolling out a service to allow those with sufficient credit quality to access credit online and repay directly from their bank account without the need for an agent visit.
It comes as part of moves to overhaul the consumer credit division, which saw no let up in tough trading during the group's third quarter to the end of September as under-pressure customer numbers dropped further, down 8.7% against a 5.5% drop in the half year.
Provident's consumer credit business - trading under the brands Provident Personal Credit and Greenwood Personal Credit - typically lends to people who are paid by the hour, whose confidence has been battered by higher energy, food and fuel bills in recent years.
But Provident said cost-cutting efforts - including 170 job losses and a reduction in its network of its self-employed agents - had helped limit the bottom line impact of the division's trading woes.
The firm expects cost savings from the action of around £10 million by the end of the year, rising to £18 million in 2014.
Its Vanquis banking arm continued to beat management expectations as customer numbers leapt 26% higher year-on-year to 1.1 million at the end of September, with no drop off in demand from borrowers turned away by high street lenders.
The group expects to see new account openings rise above the 375,000 reported in 2012, despite a pick up in marketing activity by rivals.
Peter Crook, chief executive of Provident, said: "I am pleased to report further strong growth at Vanquis Bank whilst the continuing weak conditions within CCD confirm the importance of the cost reductions implemented in July."
Provident expects to launch its new online lending business "shortly" after a trial that has been running since April.