LONDON (ShareCast) - (Sharecast News) - Doorstep lender Provident Financial said new business volumes fell 20% in the four months to April 30 as it tightened lending rules in response to the Covid-19 pandemic.
The company, which provides loans for people refused credit by mainstream banks, said there had been a slight recovery in May. Provident said it was in a strong liquidity position, with regulatory capital of £710m equating to a common equity tier 1 ratio of 33.4%.

"Since the start of Covid-19, impairment has increased due to increased arrears and a prudent approach to the treatment of payment holidays, which are starting to stabilise," the company said on Wednesday.

Loans to existing consumer credit division customers were running currently at 30% of expected volumes. Lending to new customers was paused following the government lockdown as were repayment collection visits.

"New customer lending in Home Credit UK restarted in mid-May with a cautious approach including tighter credit decisioning and an adapted model for Covid-19," the company said.

Provident said all home credit collections were now being carried out remotely, tracking at more than 80% of pre-coronavirus expectations.

New customer bookings at credit card business Vanquis Bank fell by 75% due to tighter lending rules and a pause in its credit line increase programme.

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