REG - Vanquis Banking Grp - First quarter trading statement

Vanquis BankingAnnouncement

15/05/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240515:nRSO4406Oa&default-theme=true

RNS Number : 4406O  Vanquis Banking Group PLC  15 May 2024

 

 

 

 

 

First quarter trading statement

Performance in line with expectations

 

London - 15 May 2024 - Vanquis Banking Group plc ('the Group'), the specialist
bank, today published its first quarter trading statement for the three months
to 31 March 2024.

 

Ian McLaughlin, Chief Executive Officer, commented: "Since launching our new
strategy on 27 March we have moved at pace from strategy definition to
implementation of key initiatives. We still have challenges to address as we
have previously described, but we are making good progress in building our
customer proposition and risk management capabilities to meet growing customer
needs. In parallel, we are improving operational efficiency and continuing our
investment in technology. I am pleased with the way colleagues have embraced
our new strategy and committed to realising the potential of our business."

 

Key metrics

                                              31 March 24  31 Dec 23
 Gross customer interest earning balances(1)  £2,223.3m    £2,351.2m
 Net interest margin(2)                       19.3%        19.0%
 CET1 ratio                                   20.8%        20.5%
 Retail funding                               84.1%        83.7%

 

Financial highlights

 

·     New customer acquisitions grew in line with expectations in Q1.

·     Gross customer interest earning balances declined due to the action
taken at the end of 2023 to moderate unprofitable lending growth, as well as
customers spending less in the current economic environment and paying down
more debt than forecast.

·     Increase in NIM was driven largely by the re-pricing in Cards at
the end of 2023.

·     Underlying credit quality remains stable.

·     Focus on efficiency and simplification continues, with costs in
line with expectations.

·     Vanquis remains well capitalised with strong levels of liquidity
and funding.

·     £50m of TFSME funding was repaid early in the interests of prudent
liquidity management.

 

Customer proposition update

 

·     Personal loans relaunched to existing customers in April.

·     Second charge mortgage forward flow agreements signed with Selina
Finance and Interbridge Mortgages, enabling Vanquis to purchase loans
originated by them.

·     H&T Pawnbrokers partnership live in April, presenting a "not
yet" alternative to declined credit card customers.

·     New savings products launched in April, including a 90-day notice
cash ISA and easy access deposits.

·     Snoop customer acquisition continued to perform well, with c.10,000
Vanquis customers added in the first quarter and new credit score feature
launched in April.

 

 

Operational efficiency, complaints management and better use of technology

 

·     Focus on delivering "brilliant basics", such as optimising
collections while helping customers manage their finances.

·     Complaint volumes from a single complaints management company
remain unacceptably high.

·     Flexible and more cost-effective complaint handling capability
built offshore, with artificial intelligence being deployed to automate the
logging of complaints.

·     Legal proceedings continue against the complaints management
company responsible for submitting the majority of spurious complaints.

·     Continued proactive engagement with regulators to address
complaints issues on an industry-wide basis, with the best interests of
customers at the forefront.

 

Footnotes

 

1.      Gross customer interest earning assets excludes post charge off
assets and deferred acquisition costs, which are included in Gross
Receivables.

2.      Net interest margin is calculated as Interest income less
interest expense for the 3 month period to 31 March 2024 and the 12 month
period to 31 December 2023, as a percentage of average gross receivables for
the 4 and 13 months to the period end.

3.      CET1 ratio is defined as the ratio of the Group's CET1 to the
Group's risk-weighted assets measured in accordance with the CRR.

 

Enquiries

 

Analysts and shareholders

Miriam McKay, Interim Head of Investor Relations

miriam.mckay@vanquis.com

07577 390666

 

Media

Richard King, Head of Corporate Affairs

richard.king@vanquis.com (mailto:richard.king@vanquis.com)

07919 866876

 

Simone Selzer, Nick Cosgrove - Brunswick

vanquisbankinggroup@brunswickgroup.com
(mailto:vanquisbankinggroup@brunswickgroup.com)

0207 4045959

 

Forward looking statements

 

This report may contain certain "forward looking statements" regarding the
financial position, business strategy or plans for future operations of
Vanquis Banking Group. All statements other than statements of historical fact
included in this document may be forward looking statements. Forward looking
statements also often use words such as "believe", "expect", "estimate",
"intend", "anticipate" and words of a similar meaning. By their nature,
forward looking statements involve risk and uncertainty that could cause
actual results to differ from those suggested by them. Much of the risk and
uncertainty relates to factors that are beyond Vanquis Banking Group's ability
to control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should
not be placed on such statements which speak only as at the date of this
report. Vanquis Banking Group does not assume any obligation to, and does not
intend to, revise or update these forward-looking statements, except as
required pursuant to applicable law or regulation. No statement in this
announcement is intended as a profit forecast or estimate for any period. No
statement in this announcement should be interpreted to indicate a particular
level of profit and, as a consequence, it should not be possible to derive a
profit figure for any future period from this report.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTAIMRTMTABBJI