The firm, which specialises in loans for people who are deemed too risky by normal banks, blamed changing industry and regulatory dynamics for the poor performance of its home credit division.
Doorstep lending reaches end of the road as Provident Financial pulls plug
The decision to walk away from the sector after 140 years collecting debts is part of a plan to become a broader banking group
Malcom Le May has not had the easiest few years trying to turnaround embattled lender Provident Financial.
Today, however, he is feeling particularly emotional as the plug is finally pulled on its controversial doorstep lending arm - the backbone of the business initially founded 141 years ago to help Britain s poorest households make ends meet. It is a sad day because the doorstep lending business is part of the group s heritage - it means we re moving away from the original business formed back in 1880, he says. I ve got responsibilities to a number of different stakeholders, but today is clearly a very sad day for our customers and it s going to be a difficult period for our colleagues.
BRADFORD-BASED subprime lender Provident Financial has quit doorstep lending after 141 years, placing 2,100 jobs at risk, the company announced. Bosses at the credit business said they would instead focus on its Vanquis Bank credit card division and Moneybarn car finance business. The company said the move was due to “changing industry and regulatory dynamics” alongside “shifting customer preferences”. Winding down the business or selling it will cost Provident around £100 million, it added. The decision comes as Provident revealed it sunk to a £113.5 million pre-tax loss in 2020, with £74.9 million losses in the home credit division alone. By comparison Vanquis Bank brought in pre-tax profits of £38 million and Moneybarn £10.9 million.
Last modified on Mon 10 May 2021 16.30 EDT
Provident Financial is to close its doorstep lending business, 141 years after it was first started, in a move that will put 2,100 jobs at risk.
The sub-prime lender will seek to either sell or wind down its consumer credit arm. The cost of either course of action to the company will be as high as £100m, Provident said.
The doorstep lending arm – which offered high-cost loans to people with weak credit histories – had been struggling even before the coronavirus pandemic, losing £21m in 2019. However, those losses expanded dramatically during 2020 to £75m, according to financial results also published on Monday.
Provident Financial is quitting doorstep lending after 141 years (Provident Financial/PA)
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Subprime lender Provident Financial has quit doorstep lending after 141 years, placing 2,100 jobs at risk, the company announced.
Bosses at the credit business said they would instead focus on its Vanquis Bank credit card division and Moneybarn car finance business.
The company said the move was due to “changing industry and regulatory dynamics” alongside “shifting customer preferences”.