February 27, 2020 / 7:30 AM / a month ago

Provident 2019 profit rises, home credit customer base stabilises

(Reuters) - Provident Financial (PFG.L) on Thursday posted a 1.6% rise in 2019 adjusted earnings and raised its dividend payout, as a revamp of its home credit business bore fruit, but the British doorstep lender flagged an uncertain outlook post-Brexit.

After successfully fending off a hostile takeover bid from smaller rival Non-Standard Finance last year, Provident this month took a 2.8 million pound fine for vehicle-financing arm Moneybarn, concluding the latest in a line of investigations into its sales and business practices.

Provident has also set out to return its consumer credit division (CCD) to profitability after it suffered a wrongly executed restructuring in 2017.

The lender, which provides credit to people who do not meet the lending criteria of mainstream banks, has been working at winning back customers after the reorganisation.

To that end, the company said customer numbers have now started to stabilise at just over 500,000. It added that a pick up in collections were now expected to offset impairment trends in 2020.

It has proposed a 60% increase in its final dividend to 16 pence a share.

Provident said adjusted pretax profit rose to 162.6 million pounds in the 12 months ended Dec. 31, from 160.1 million pounds a year earlier.

However, adjusted earnings at its credit card business, Vanquis Bank, which was touted as a profit driver through the CCD issues, dropped 9.1% to 173.5 million pounds, mainly due to a 20 million pound reduction in Repayment Option Plan income.

GRAPHIC: Provident fares better than rivals in last two years here

Reporting by Muvija M in Bengaluru; Editing by Maju Samuel

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