Subprime lender Provident buoyant in downturn

By Lorraine Turner

LONDON (Reuters) - Subprime lender Provident Financial (PFG.L) on Wednesday reported a growing customer base, saying it hoped to win more new business from banks as they tighten lending criteria and as recession looms.

"We're being more selective, but against that we've got a bigger volume of applications," said Chief Executive Peter Crook, whose company specialises in doorstep loans of under 500 pounds which require weekly repayments.

"There is potentially a lot more volume to come our way, as the economy slides further into negative territory. We'd expect other lenders to continue to tighten criteria which potentially creates more demand," he told Reuters.

Fears of rising bad debts -- as global economies slip into recession -- were calmed as Provident said its level of arrears and impairment levels were in line with its forecast.

The company said its outlook for the full year was on track, reassuring investors and boosting its share price as much as 4.9 percent.

Customer volumes continued to grow at the same pace in the third quarter as in the first half -- up 7 percent at a time when mainstream banks are turning down more risky customers.

"Do not be put off by the fact that this is a lender, dealing in the subprime market," said Justin Bates, an equities analyst at Daniel Stewart & Co. "Today's market conditions are ideal for the group."

"In the recession of the early '90s the group increased profits by 124 percent between 1990 and 1994," he added.