Thursday, 15 March 2007

Provident Customers and Profits Up As Banks Tighten Lending Criteria

Provident's half year pre-tax profits were reported up 5.5% to £193.1 million earlier this month, supported by the first growth in customers in the UK Home Credit Market for three years (up 2% to 152 million).

Provident's Chief Executive Peter Crook commented:

"We've obviously seen significant rises in impairment at most of the banks and credit card issuers. As a result, they've tightened up their credit criteria significantly. My sense is that this is pushing more people down into the home-collected part of the market, and that is the main source of where those sorts of consumers will access small sums of credit."

The Home Credit Market was found to be uncompetitive and offering poor value to customers by the Competition Commission in late 2006 at an estimated cost of at least £75 million per year. Remedies designed to address this are expected to be implemented by the end of 2007 and may take several months beyond that to have an impact on prices. In the interim, these figures show that Provident continues to profit at their customers' expense.

No comments: