LONDON (ShareCast) - (Sharecast News) - Vanquis Banking Group reported gross customer interest earning balances of £2.23bn at the end of its first quarter on Wednesday, reflecting a slight decline from the £2.35bn it reported as at 31 December.
The London-listed company said its net interest margin increased to 19.3% from 19% at the end of December 2023, while its CET1 ratio strengthened to 20.8% compared to 20.5% previously.

Retail funding also saw a slight uptick to 84.1% from 83.7% over the same period.

New customer acquisitions grew as expected during the quarter, but the board put the decline in gross customer interest earning balances to strategic measures implemented at the end of 2023 to moderate unprofitable lending growth.

That decrease was further influenced by reduced customer spending in the current economic climate and higher-than-anticipated debt repayments.

The increase in net interest margin was primarily attributed to repricing in cards at the end of 2023.

Despite the fluctuations, the board said the company's underlying credit quality remained stable.

The group said it was continuing its focus on efficiency and simplification, with costs aligning with expectations.

Vanquis Banking Group said it was well-capitalised with robust levels of liquidity and funding, noting that £50m of TFSME funding was repaid early to ensure prudent liquidity management.

In terms of customer proposition updates, several initiatives were launched in April, including the relaunch of personal loans to existing customers and the signing of second charge mortgage forward flow agreements with Selina Finance and Interbridge Mortgages.

Additionally, partnerships with H&T Pawnbrokers and the introduction of new savings products were designed to diversify offerings and cater to customer needs.

Operational efficiency remains a priority, with a focus on delivering "brilliant basics" and optimising collections while assisting customers in managing their finances.

However, complaint volumes from a single complaints management company remained high, prompting the development of flexible and cost-effective complaint handling capabilities, including the deployment of artificial intelligence for complaint logging automation.

Legal proceedings were ongoing against the complaints management company responsible for what Vanquis said were spurious complaints, while proactive engagement with regulators was looking to address industry-wide complaints issues in the best interest of customers.

"Since launching our new strategy on 27 March we have moved at pace from strategy definition to implementation of key initiatives," said chief executive officer Ian McLaughlin.

"We still have challenges to address as we have previously described, but we are making good progress in building our customer proposition and risk management capabilities to meet growing customer needs.

"In parallel, we are improving operational efficiency and continuing our investment in technology."

At 1004 BST, shares in Vanquis Banking Group were down 0.59% at 56.26p.

Reporting by Josh White for Sharecast.com.

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