Historic lender Provident Financial has stepped up its defence against a hostile bid by Non-Standard Finance by appointing a new managing director and chairman to start next month.
Provident, which owns Vanquis credit card and the Moneybarn brand, and lending to 10 to 12 million consumers with patchy credit history, has been challenged by NSF over its performance. Vanquis has several hundred thousand card holders in Scotland.
The 180-year-old lender – known for the local “Provy man” who collected repayments door to door – has stated that NSF is not fit to run a company of its size. NSF owns the Everyday Loans, George Banco and Loans at Home brands and has annual of revenue of £31 million, compared with Provident’s £1.19 billion.
The Financial Conduct Authority fined Provident £1.96 million last year and ordered the company to pay compensation over the mis-selling of Repayment Option Plans for Vanquis cards.
Now Provident has reiterated that is has resolved all outstanding regulatory issues with the FCA and has completed the search for a new managing director and a new chairman for Vanquis, who has relevant retail banking and consumer finance experience and is subject to regulatory approvals.
The company said it has stabilised the group during 2018, and the management team is in the process of developing and implementing a number of planned growth and efficiency initiatives.
Vanquis is a regulated bank and the largest single business. It has been winner of Credit Builder Card provider for the four years running in the Moneyfacts Consumer Awards.
“The Provident board believes that NSF’s management has limited banking and credit card experience.’’
Referring to an on-going investigation by the FCA into its Moneybarn business, the company said: “The board believes that the sale of Moneybarn is strategically and financially flawed. Firstly, it would significantly impact the dividend trajectory for the group, is unlikely to result in any meaningful one-off capital return to shareholders, and at this point in the economic cycle is not value maximising for shareholders. Secondly, the board is also of the view that the proposed sale of Moneybarn fails to recognise the strong financial performance of the business and its synergistic benefits with Vanquis.’’
They added that NSF has failed to take into account the significance of Moneybarn’s role as an important guarantor to the group’s funding facilities and bonds. The FCA will be issuing its final notice in respect of the investigation in due course.
The company has also been working to reduce the cost based of its Consumer Credit Division, with the FCA agreeing the introduction of variable performance-related pay.
“We have implemented a voluntary redundancy programme, which is expected to reduce headcount by approximately 200 in CCD’s central support functions. This is part of the approximately 1,000 headcount reduction already achieved in the past 12 months,’’ said Provident.