Provident Financial bounces back to profit after shift away from subprime lending
![](https://www.cityam.com/wp-content/uploads/2019/11/455143288.jpg?w=742)
Subprime lender Provident Financial bounced back into profit last year as it rode an economic rebound and moved away from riskier consumer lending.
Pre-tax profits at the firm hit £4.1m last year despite the balance book weathering a £95.5m hit stemming from the closure of its consumer credit business which offered short term loans at high cost.
Boss Malcolm Le May said the year marked a rebound for the firm.
“I am pleased to report that the group’s financial performance in 2021 improved significantly year-on-year,” he said.
“Most importantly, we achieved all of this whilst maintaining a focus on providing our customers with the credit products they need.”
Le May said the lender had shifted its focus onto providing “mid-cost lending” products to over 1.6m customers.
Provident’s credit card division recorded a drop in revenue, which bosses chalked up to less consumer spending through lockdowns, but still underpinned a profits boost for the group.
Adjusted pre-tax profits for the division increased more than fourfold to £173.9m.
The firm’s exit from the subprime lending market followed a claims mismanagement scandal as borrowers were sold unaffordable loans. The firm said it would pay £50m to meet the claims last year.