Car finance lender Moneybarn has revealed a 28.3% increase in profit before tax to £28.1m for the 12 months to 31 December 2018.
According to the company, the latest results reflect improved credit quality and investment in strengthening the senior management team and increasing resource in customer services and collections. Moneybarn also noted strong growth in new business volumes of 18%, driven by a continued demand for used cars and residual values, while operational enhancements that have improved the service for customers have also contributed to growth.
The lender is currently working with the regulator after the FCA launched an investigation into the firm in 2017. The watchdog wanted to examine the processes applied by Moneybarn in relation to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties.
This year’s report referenced “significant progress” with the FCA regarding the redress to be paid to resolve the issues arising in respect of the investigation.
The results echo wider success for Moneybarn’s parent group Provident Financial, which posted profit before tax at £153.5m – an 82.3% increase on 2017. The board has also declared a nominal dividend of 10p per share for 2018.
The announcement follows the recent news that Provident Financial Group rejected a £1.3bn takeover bid from smaller lending group Non-Standard Finance (NSF). In its rejection notice, Provident said the board did not believe that disposing of Moneybarn “at this point in the economic cycle would maximise value for shareholders”.
Provident reaffirmed its position on the offer, stating that it has “major strategic flaws and appears to be based upon a superficial and misguided view that the regulatory approach to PFG would be different if the group was owned by NSF”.
Malcolm Le May, group chief executive of Provident, said that the company has strengthened its relationship with customers, regulators and stakeholders in 2018. “We aim to build on the considerable momentum within the Group in 2019 and beyond, with a focus on delivering attractive and sustainable returns to our shareholders as we execute on our strategy,” he concluded.