Vanquis Banking Group PLC First quarter trading statement (5675A)
May 25 2023 - 1:00AM
UK Regulatory
TIDMVANQ
RNS Number : 5675A
Vanquis Banking Group PLC
25 May 2023
Vanquis Banking Group
First quarter trading statement
25 May 2023
Vanquis Banking Group plc ('the Group'), a leading specialist
banking group with a focus on customers in the mid-cost and
near-prime credit markets, today publishes a trading update
covering the three months to the end of March 2023, unless
otherwise stated.
Malcolm Le May, Chief Executive Officer, commented:
"The Group has made a positive start to the year. Our strong
competitive position, supported by the Group's access to capital
and funding markets, is further strengthened by our strategic
repositioning as a specialist banking group, focused on customers
in the mid-cost and near-prime credit markets. These strengths
enable the Group to keep supporting our customers' credit
requirements responsibly and, as a result, grow our receivables
sustainably. Furthermore, we continue to support our customers
during the prevailing macroeconomic conditions of high inflation
and cost of living challenge.
For the remainder of 2023, we will focus on growing our
businesses and continuing to deploy the capital at our disposal to
generate attractive and sustainable returns for our shareholders
over the medium-term."
First quarter trading
During the first quarter of the year, the Group continued to
trade in-line with management's expectations. The Group also
continued to see opportunities for growth in its addressable
markets enabled by its competitive advantages across capital,
funding, and credit risk management. Whilst the Group continued to
prudently analyse for any signs of customer distress given the
macroeconomic backdrop, it has made no material changes to its
underwriting criteria in any of its products. During the remainder
of 2023, given the backdrop of rising interest rates and persistent
inflation, the Group will continue to focus on maintaining strong
asset quality and risk adjusted returns. If required, the Group
will consider tightening underwriting criteria at the margins.
Performance by business:
-- The Group's credit card business started 2023 positively. New
customer acquisition rates increased year-on-year, with no change
to underwriting standards. Delinquency trends remained consistent
with those reported over the last 12 months, and customer
behavioural traits were in keeping with previously seen seasonal
trends regarding spend and repayment rates. Therefore, receivables
at the end of the quarter were broadly flat versus 31 December 2022
but increased by approximately 18% year-on-year.
-- The Group's vehicle finance business continued to see strong
levels of new business and receivables growth during the first
quarter of the year. New business volumes in March represented the
highest monthly result ever and, reflecting the repositioning
towards lower risk customers in recent years, the arrears rate
continued to improve during the period. As a result, receivables at
the end of the quarter were approximately 8% higher versus 31
December 2022.
-- The Group's personal loans business also had a strong start
to the year. New customer acquisition volumes and total active
customer numbers tracked ahead of expectations during the period
and, as a result, receivables as at the end of March 2023 increased
by approximately 40% versus 31 December 2022. Overall,
approximately 25% of new loans are now being written on the Group's
new IT platform, Gateway.
-- Towards the end of the period, the Group's second charge
mortgage business entered a Heads of Agreement for its first
forward flow agreement to acquire between GBP5m and GBP10m of
existing second charge loans per month via an established market
intermediary. This marks an important first step for this business
and the Group will update the market as to how it is progressing in
due course.
Enquiries:
Analysts and shareholders:
Owen Jones, Group Head of
Investor Relations 07341 007842
Owen.jones@vanquisbankinggroup.com
Media:
Richard King, Vanquis Banking
Group 07919 866876
Nick Cosgrove/Simone Selzer,
Brunswick 0207 4045959
vanquisbankinggroup@brunswickgroup.com
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END
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