Provident signals cost-cutting as suitor stalks doorstep lender
Takeover target Provident is to ramp up cost-cutting measures as it continues to battle a £1.3 billion hostile approach from rival Non-Standard Finance (NSF).
In a first quarter trading update, the doorstep lender laid out a strategy that includes “responsible growth, supported by cost control and efficiency” as it looks to realise “synergies that arise from common processes across the group”.
They will be felt across distribution, credit, collections and digital throughout the group.
Provident added that trading was in line with expectations across its four divisions.
The subprime lender’s Vanquis Bank ended the quarter with 1.79 million customers, an increase of 4%, with new customer growth rising 13%. At Moneybarn, new business volumes jumped 40% and 16% at Satsuma.
The core home credit unit saw customer growth rise 27%.
Boss Malcolm Le May said: “We have diligently built on the stronger foundations established over the past 18 months and have delivered strong customer growth and new business volumes, with stable delinquency trends and overall results in line with management’s plans for 2019.”
The trading update comes as Provident continues to battle a hostile takeover attempt by NSF, which said last month that it is on track to receive regulatory approval for the deal.
Provident has splurged between £17 million and £22 million on lawyers, advisers and PR firms defending itself from the takeover.
NSF has acceptances for more than 50% of Provident’s shares, including from Woodford Investment Management, Invesco Asset Management and Marathon Asset Management, who together hold a 49% stake.
However, the level of support has not moved upwards for several weeks.
Investors in Provident will have until May 15 to register acceptances for the deal, a deadline that will not be extended.