Vanquis share price rises as lender returns to profitability and flags job cuts
Shares in Vanquis Banking Group soared on Tuesday morning after the bank confirmed that it returned to profit in the third quarter.
The specialist lender confirmed that its attempts to slash costs and boost margins helped the firm into profitability. It now expects to deliver adjusted pretax profit between £25-30m for the full year.
Looking forward, Vanquis hopes to cut costs by around £60m next year, including by cutting around 350 roles. It noted that it had increased prices across its vehicle finance and credit card divisions to reflect rising interest rates.
Despite returning to profitability, Vanquis said its dividend for the second half would not be more than 1p per share. Its shares were trading around seven per cent higher on Tuesday morning.
Chief executive Ian McLaughlin said: “We have worked at pace to undertake a detailed operating review of the group. We have scrutinised every cost centre and product line. As a result, we have taken action to stabilise our NIM, significantly reduce our cost base and put ourselves in a position to clarify guidance for our year end PBT.
“We have started a full strategy review that will complete by the end of January 2024. The outputs of this will enable us to become the outstanding customer champion in our target market segment and deliver sustainable, profitable growth based on our deep understanding of, and commitment to, our customer base,” he added.
Vanquis, previously known as Provident Financial, has faced a difficult few years after it withdrew its high-cost consumer credit arm, including its doorstep lending division, in 2021. It now specialises in credit cards and personal loans.
Over the first half of the year, the Bradford-based lender reported a loss of £14.5m, swung from a profit of £46.9m the year before.