Vanquis swings back to black, shares spark
Shares in Vanquis Banking Group plc jumped on Wednesday, after the lender swung back into profit.
The former Provident Financial, a specialist in mid-cost and near-prime finance, has been hit by a swathe of no-win, no-fee complaints related to its credit card division.
The costs of processing the claims, despite the "vast majority" not being upheld, saw the Bradford-based firm slump to a £34.8m loss last year.
But updating on trading on Wednesday, Vanquis said it had returned to profitability during the first quarter.
Gross customer interest-earning balances rose 1.8% in the three months to March end, to £2.3bn.
The net interest margin was 17.8%, down 1.1% annually but unchanged on the fourth quarter.
Ian McLaughlin, chief executive, said: "Vanquis' strategic delivery remains on track. The group returned to profitability and grew gross customer interest-earning balances, building on the momentum shown in the fourth quarter of 2024.
"Overall costs remained well-controlled and credit quality was robust, with our customers continuing to show financial resilience."
McLaughlin also welcome the Financial Ombudsman Service's revised fee structure, which came into effect on 1 April.
Its introduction had led to a reduction in unmerited referrals from claims management companies, he noted, with complaint costs remaining in line with expectations.
As at 1130 BST, shares in Vanquis had put on 9% at 76.34p.
Provident Financial was founded in 1880 as a doorstep lender, but faced a surge in complaints in recent years, hitting both profits and the share price.
The firm therefore opted to move away from sub-prime doorstep lending in 2023, changing its name to that of its credit card business to better reflect its mix of products.
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