Lender firm to repay furlough

PROVIDENT SHARES UP DESPITE £33m LOSS

DOORSTEP lender Provident Financial has pledged to repay the employee furlough cash it received from the Government.

The sub-prime lender said first-half losses were not as bad as it feared amid the pandemic. The group swung to an underlying pre-tax loss of £32.6million for the first six months of 2020, compared to a profit of £80.4m a year ago.

Its doorstep lending arm took the hardest hit, with losses more than doubling to £37.6m, though its Vanquis Bank and Moneybarn businesses remained in profit.

Customer numbers in its doorstep lending business fell around 29% to 379,000 as lockdown had an impact on its ability to take on new borrowers.

Malcolm Le May, chief executive of Provident Finance, said: “The first six months of this year have been the most difficult and testing in my career.

“However, I am very pleased with how well the group has responded to the challenges brought about by Covid-19 and how effectively we have operated.”

Shares jumped 12% as Provident said it had performed better than expected.

The group said it had seen some “encouraging signs” of increased activity levels since the end of June, with its car finance division Moneybarn seeing record new business in July.

But it added the potential economic shock and uncertainty that Covid-19 will still bring must not be underestimated.

Le May added: “Financial and operational performance were better than expected, and therefore we have decided to repay all furlough support to the Government.

“We believe this is the right thing to do.”