Yes Car losses make Provident Financial press alarm |
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Published
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Wed, 13 Jul 2005 22:35
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Lender Provident Financial Plc has sent out an alarm regarding its first-half profits, anticipating its performance to stagger below market expectations owing to the huge losses suffered at its car finance arm, Yes Car Credit. Losses at Yes Car could range anywhere between 15-20 mln stg in the entire year 2005.
Nevertheless, Provident has also given an assurance that it would look at the trading problems at Yes Car as well as at other branches to check if they were faring well. Provident intends to help Yes Car recuperate and comfortably breakeven next year in 2006.
Meanwhile, Provident’s large UK home credit business is performing impressively despite difficult market circumstances and fewer customers. While May end of 2005 saw 4% lesser customers as compared to last year, the amount of lending rose by 5% in the five months ending May 2005. The lending group stated that sufficient control was exercised on its cost levels and that the quality of the credit it offered conformed to its established standards and promised stability.
Yes Car Credit pretax losses in the volume of sales in the five-month period ending May 31 2005, amounted to 4.6 mln stg, which was 26 % lower year-on-year. The group explained that the market was not quite cheerful, as year-on- year volumes had decreased considerably in the second hand car credit market and insurance products had not yet diffused well into the market after the new regulation.
Provident, however, seems to have taken the reins in its hands and has effected certain changes in the management and sales structure to reinforce quality and standard. It has also employed few people on chief positions over the past three months and reiterated that it was on its way to execute a “comprehensive improvement plan” that would work towards rebuilding Yes Car Credit’s crumbling performance.
It added that a latest and upgraded report on the implementation of the new plan would be published along with the interim results due in the mid of September.
Yet, Provident’s Vanquis Bank Branch that gives credit cards to the less privileged or “non-standard UK market”, has no complaints. Vanquis held a respectable number of 108,000 credit cardholders on May 31, 2005 and was moving along well towards achieving its goals.
For that matter, even Provident Insurance has reported exceptional results with its policyholders unwavering at 500,000 and cost of claims developing favourably.
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