Provident Financial PLC Fitch credit rating (6784F)
10 Marzo 2020 - 11:14AM
UK Regulatory
TIDMPFG
RNS Number : 6784F
Provident Financial PLC
10 March 2020
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 GBP3m, representing an annualised increase of
approximately GBP4m 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.
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END
MSCMZGMFNGFGGZM
(END) Dow Jones Newswires
March 10, 2020 13:14 ET (17:14 GMT)
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