|Key people||John van Kuffeler, (Chairman)
|Revenue||£980.0 million (2012)|
|Operating income||£181.1 million (2012)|
|Net income||£148.0 million (2012)|
Provident Financial plc is a financial services group based in Bradford, UK. It specialises in Home Collected Credit (HCC) and also owns Vanquis which offers credit cards. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
The Company was established in Bradford in 1880 by Joshua Kelley Waddilove to provide affordable credit to families in West Yorkshire. The company's credit methods were rapidly popularised amongst the working classes, but from its outset The Provident was subjected to criticisms by those who were opposed to consumer credit or the costs associated with doorstep credit. The Company was first listed on the London Stock Exchange in 1962. In 1997 it extended its operations to Poland and the Czech Republic, later operating in Slovakia, Hungary, Romania and Mexico.
In 2002 Provident Financial formed Vanquis Bank Limited, with a full banking license from the FSA, a consumer credit license with the Office of Fair Trading and a license from VISA International to operate and issue credit cards under the VISA brand. Vanquis Bank Limited specialises in the pre-paid credit card sector, enabling people to use the benefits of a credit card where normally due to their credit profile would seldom be successful in obtaining a card from mainstream card issuers.
In June 2004, the Office of Fair Trading referred a Super-Complaint from the National Consumer Council expressing their concern over a perceived lack of competitiveness, particularly as the four largest operators accounted for around 70% of the business in the home-collected credit industry. The Office of Fair Trading published a consultative paper which echoed this concern about the concentration of market share and referred the case to the Competition Commission.
Although the Competition Commission's conclusion confirmed high levels of satisfaction among customers who found home credit products well suited to their needs, they believed that measures should be implemented to make the sector more open and transparent. They required that the website Lenders Compared be set up, the costs of which was to borne by Provident and the other large operators. In addition, all home credit operators were required to advertise the new site in documentation and advertisements and to offer customers regular statements. The Commission rejected the concept of price caps, recognising that home credit is valued by many customers and did not believe that it would help customers if home credit were less available as a result and the potential of people then turning to unlicensed lenders (loan sharks).
In 2005, the company closed its Yes Car Credit division, which had sold second hand vehicles to customers with problematic credit histories via a national network of retail locations, offering the vehicle and finance as a single package. The company had been plagued by bad publicity, including a TV investigation into its selling practices, pressurisation of staff, unreliable vehicles and debt collection methods.
In 2007 it demerged and a new separate public company was formed called International Personal Finance. This company now holds all of Provident Financials non-UK operations. It also sold the motor insurance business leaving Provident Financial to concentrate on UK only financial products.
In 2011, Vanquis were criticised for offering Repayment Option Plans to their credit card customers, a form of insurance some consumer sites referred to as the 'new Payment protection insurance (PPI)'.
In the UK, Provident trades under a number of different brands, including Provident Personal Credit and Greenwood Personal Credit for its home credit operations, and Vanquis Bank for its credit card operation. Real Personal Finance became a trading style of Provident Personal Credit, offering direct debit loans rather than the traditional home collected credit; the venture proved to be unprofitable and the RPF product was withdrawn in February 2010. The home lending operations are based in the head office building on Godwin Street in Bradford and Vanquis Bank is based in London with purpose built premises located in Chatham, Kent.
The company's biggest business is lending to people in their homes via a network of local agents. Out of an estimated 3 million people who borrow from home credit providers, 1.8 million place their business with Provident Financial, giving the company an estimated 60% market share.
- Preliminary Results 2012
- O'Connell, Sean, Credit and community: working class debt in the UK since 1880 (Oxford University Press, 2009)
- OFT action on Home Collected Credit Super-complaint
- Doorstep agents help Provident Financial ride out the credit storm, Financial Times, 29 December 2007.
- "Poverty - The poor need a better deal from the banks". Parliamentary Brief. Retrieved 2011-12-08.
- Lenders Compared Website
- OFT: Review of high cost credit
- UK Parliament Website: Memorandum submitted by Centre for Responsible Credit (FW 11)
- Investors Chronicle: Provident to close Yes Car Credit
- Car finance glossary
- Provident Financial puts £70m into demerger
- Provident Financial sells motor insurance arm to GMAC for £170m
- Vanquis credit cards profit from 'new PPI' choose.net, 17 November 2011
- Bond of the Week: Provident Financial issues another new retail bond Investors Intelligence, 15 March 2013