Provident Financial returns to interim profit as wind-down costs fall

Provident Financial Group logo is seen on a smartphone in front of displayed stock graph in this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration

July 27 (Reuters) – British subprime lender Provident Financial (PFG.L) returned to interim profit on Wednesday, as costs related to the wind-down of its doorstep lending unit fell and demand remained robust in its credit card business.

Lenders, which benefited from increased borrowing as the market recovered from the pandemic, are now battling a possible spike in bad loans as the cost-of-living crisis deepens.

The London-listed company, which has placed its doorstep lending unit into a managed run-off since May 2021 after a surge in complaints, said it is in talks with regulators regarding future capital requirements after the unit winds down.

Provident is also looking to focus more on lower risk customer segments amid uncertain macroeconomic conditions.

The company reported a pretax profit of 37.3 million pounds ($44.96 million) for the six months ended June 30, compared to a loss of 44.2 million pounds in the year-ago period.

($1 = 0.8296 pounds)

Reporting by Sinchita Mitra in Bengaluru; Editing by Subhranshu Sahu

Our Standards: The Thomson Reuters Trust Principles.