Regulatory Story | |||
Go to market news section | |||
|
Provident Financial plc
Fitch credit rating
Fitch Ratings has today downgraded the group's credit rating from BBB- with a negative outlook to BB+ with a stable outlook. The downgrade results in an increase in the funding rate on the group's syndicated revolving bank facility and the group's senior bonds. This is expected to result in an increase in 2020 funding costs of approximately £3m, representing an annualised increase of approximately £4m per annum.
Simon Thomas, Chief Financial Officer, Provident Financial plc, commented:
'The downgrade to the group's credit rating by Fitch reflects the slower than anticipated recovery of the home credit business since the group was put on negative ratings watch in March 2018. However, in coming to this conclusion, Fitch acknowledged that they expected the gradual improvement in CCD to continue and that the group was better placed to withstand the ongoing elevated level of regulatory risk than its smaller or more concentrated peers. In addition, they continue to recognise the group's recovering profitability, its sound capital and liquidity positions and its franchise strength in the markets in which the group operates.
In line with previous guidance, we continue to expect that CCD will deliver a breakeven result in 2020, before taking account of the increase in the group's funding rate. In addition, we remain confident that the business is capable of delivering the group's target returns in the medium term, particularly given the ongoing market disruption from tougher regulation.
As we set out at our preliminary results announcement, we remain focused on diversifying and lowering the cost of the group's funding which was recently evidenced by the securitisation of Moneybarn's business flows. We do not believe that the downgrade will have a significant impact on the group's ability to secure new funding at competitive rates.'
Enquiries: | |
Media | |
Richard King, Provident Financial | 0203 620 3073 |
Nick Cosgrove/Simone Selzer, Brunswick | 020 7404 5959 |
Investor Relations | |
Gary Thompson/Vicki Turner, Provident Financial | 01274 351900 |
investors@providentfinancial.com |
Notes to Editors
1. Provident Financial plc is a leading provider of credit products which provide financial inclusion for those consumers who are not well served by mainstream lenders. The group serves 2.3 million customers and its operations consist of Vanquis Bank, Moneybarn, and the Consumer Credit Division (CCD) comprising Provident home credit and Satsuma.
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 or visit www.rns.com.
London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply. |
©2014London Stock Exchange plc. All rights reserved |
Fitch credit rating - RNS
Attachments
- Original document
- Permalink
Disclaimer
Provident Financial plc published this content on 10 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 March 2020 17:18:06 UTC