Experian warns of crisis for consumers
The crisis in the financial markets is turning into a crisis for consumers as mortgage lending and other loans dry up, credit checking giant Experian today warned today.
Tough for the man in the street: Robert believes the key is how the consumer feels
Chief executive Don Robert said that what started as a major headache for investment banks and other financial services firms on Wall Street and in the City is now spreading to the real economy and hitting consumers.
Experian, which has information on 40m consumers in the UK and 220m in the US, has felt the pain because banks and other lenders are calling for fewer credit checks as they issue fewer loans.
It today reported a better-than-expected 15% rise in full-year profits but warned revenues in the first quarter of the new financial year will be 'flat to slightly down'.
Robert said: 'We still see a lot of uncertainty in the US and UK markets and as the focus shifts away from Wall Street and on to Main Street it turns to the man on the street, to the consumer, and how they are feeling.
'We really see difficult times for the US consumer and they are exhibiting a lot of caution in how they apply for credit and how they spend money. It is not a time of exuberant spending.
'The UK seems to feel a bit more stable but the banks are still very cautious on how they are approving loans and extending credit. We are in a better shape than in the UK for the time being but it would not surprise me to see things weaken in the UK.'
The warning came as Experian reported profits of $945m (£482m) for the year to the end of March on revenues up from $3.49bn to $4.13bn, boosted by business across Asia and in eastern Europe. Organic revenue growth was 4%.
Despite a difficult first quarter this year, Robert said he was 'confident on the outlook'.
The firm has cut hundreds of jobs from its 8000 strong workforce around the world and today paved the way for more as it raised its annual cost savings target from $80m to $110m.
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