VANQUIS BANKING GROUP PLC - Interim Results

Vanquis Banking Group reported a mixed set of interim financial results, with strong underlying operational progress offset by macroeconomic headwinds that prompted management to revise its medium-term guidance. Profit before tax increased 44% year-on-year, exceeding the Group’s full-year 2025 profit in just six months, while customer balances grew 24%, revenue increased 8%, and credit quality remained stable alongside improved cost efficiency. The Group continues to execute its transformation strategy, highlighted by the successful rollout of its new mobile app to more than one million customers, deployment of AI-powered customer service capabilities, expansion of its second charge mortgage portfolio, and ongoing improvements in customer satisfaction and operational efficiency. However, weaker-than-expected credit card utilisation, driven by lower consumer confidence, together with a higher IFRS 9 macroeconomic provision linked to rising UK unemployment forecasts, reduced earnings expectations and delayed the Group’s targeted mid-teens return on tangible equity (ROTE) to 2028. Despite these challenges, management reaffirmed confidence in its long-term growth strategy, supported by continued customer acquisition, disciplined cost reduction initiatives, a strengthened capital position under Basel 3.1, robust liquidity and funding, and an expanded transformation savings target of £30–35 million. The Board also signalled its intention to reinstate a modest dividend for FY2026, reflecting confidence in the business’s improving financial position. Overall, Vanquis believes its transformation remains firmly on track, positioning the Group to capitalise on long-term growth opportunities across its large underserved UK lending market while continuing to improve profitability, margins, operational efficiency and shareholder returns.