Vanquis Banking Group Reports Pretax Loss for First Half of 2023
Vanquis Banking Group, formerly known as Provident Financial, has announced a pretax loss of £14.5 million ($18.6 million) for the first half of 2023. This is a significant change from the previous year when the company reported a pretax profit of £46.9 million.
The loss can be attributed to higher expected credit losses resulting from the impact of IFRS 9 on the company's loan book growth, as well as increased costs due to inflation. Despite these challenges, Vanquis remains optimistic about its future performance.
Total income for the half-year decreased to £237.1 million, down from £240.3 million in the previous year. Net interest income also saw a decline, amounting to £201.9 million compared to £213.1 million in the same period a year ago.
Despite the financial downturn, Vanquis is still confident in delivering a net interest margin of over 18% for the full year of 2023, as indicated by its first-half margin of 18%. The company expects its second-half total costs to be similar to those of the first-half, which amounted to £157.0 million.
Vanquis ended the period with a fully loaded CET1 ratio of 21.7%, demonstrating financial strength, albeit lower than the 27.3% ratio recorded a year ago.
The company's board has proposed an interim dividend of 5.0 pence per share, consistent with the previous year's payout.
While the first half of 2023 proved challenging for Vanquis Banking Group, the company is committed to navigating these obstacles and maintaining its position in the market.
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