Provident Financial Plc (PFG), the U.K.’s largest subprime lender, cut 170 jobs at its consumer-credit business as rising fuel, food and utility bills eroded demand for borrowing.
The cuts, equivalent to about 10 percent of the division’s workforce, came as first-half profit at the unit fell 27 percent 36.1 million pounds ($55.4 million), the Bradford, England-based company said in a statement today. A 70 percent increase in profit at its Vanquis Bank unit helped to boost Provident Financial’s net income to 55.3 million pounds from 54 million pounds in the year-earlier period.
“It’s a tale of two different businesses,” Chief Executive Officer Peter Crook said by telephone today.
Provident Financial’s consumer-credit division has been hit by a weak U.K. economy, low customer confidence and pressure on household incomes. Demand for credit from higher-quality customers, who typically borrow more for longer, remains weak, the company said in the statement.
“The group overall has performed in line with its internal plan in the first half of 2013 and expects to do so for the year as a whole,” the company said.
The shares rose 0.7 percent to 1,599 pence as of 8:15 a.m. in London trading. The stock has advanced 17 percent this year, for a market value of about 2.2 billion pounds. The company will pay a first-half dividend of 31 pence a share, up from 28.8 pence.
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