November 7, 2019 / 8:56 AM / 5 days ago

UPDATE 1-Provident expects to add more home credit customers

(Adds details from statement, shares, background on restructuring)

Nov 7 (Reuters) - Sub-prime lender Provident Financial said on Thursday it expects to add more customers at its home credit business after posting a 6% rise in new and returning customers in the third quarter.

The company rebuffed a hostile 1.3 billion pound ($1.67 billion) takeover offer from smaller rival Non-Standard Finance in June and has since pledged to return its home credit unit to profitability.

Provident Financial has cut 1,400 jobs within the business since a wrongly-executed restructuring in 2017, it said, adding that a further 400 “customer experience managers” and field managers have either left or are expected to leave by the end of 2019.

One-time costs in the unit are expected to increase by roughly 5 million pounds from the interim results, Provident said, citing mainly restructuring and redundancies.

The company, which provides credit to people who do not meet the lending criteria of mainstream banks, said customer numbers at its home credit business was 388,000 at the end of the quarter to Sept. 30, lower than the 403,000 at June.

While customer additions grew year-on-year, it was not yet at a level sufficient to stabilise the customer base, Provident said.

However, the company said the momentum in business volumes continued to improve in the last quarter, with customers additions expected to grow as the company enters the seasonal peak in trading in the final quarter of the year.

The comments reflect a phase of recovery for the century-old lender, which has seen its shares plummet, profits shrink and top boss leave after the botched-up restructuring.

Shares in the mid-cap lender climbed 4.2% by 0837 GMT, helping ease some of the 20% drop year-to-date. ($1 = 0.7781 pounds) (Reporting by Muvija M in Bengaluru, Editing by Sherry Jacob-Phillips and Aditya Soni)

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