PCF Group enjoys 50% increase in lending volumes amid Brexit caution

Specialist banking group PCF Group reported on Monday that it has expanded its lending volumes by 50% over the past year and achieved record levels of new business.

A trading statement covering the 12 months ended 30 September revealed that the PCF Bank lending portfolio increased from £146m to £219m, remaining on track to achieve growth to £350m by September 2020, while new business originations were 75% ahead of the prior year at £148m.

August and September were both record months for the bank in terms of new business origination, in what the AIM-traded company said reflected its strong banking model and reputation for excellent customer service.

Roughly 70% of originations over the year were in ‘prime’ credit grades, a conscious strategy by the company amid a “cautious Brexit outlook”.

The company, which started life as a provider of hire purchase and finance lease facilities before gaining its full banking licence in December 2016, said the move will improve future profitability despite a reduction in anticipated net interest margin as lending to prime borrowers leads to lower levels of loan delinquency later and increased scale of PCF’s lending book in proportion to fixed costs improves the company’s “operational gearing”.

Scott Maybury, chief executive of PCF, said: "A diversified banking model is proving a great strength and our first full year as a bank has been extremely encouraging. We have made excellent progress against ambitious targets and our focus on organic growth through existing lending markets has now been supplemented with an earnings enhancing acquisition."

The bank acquired broadcast media funding and leasing services outfit Azule Limited earlier this month, a business that has an origination capability of over £50m per year according to PCF.

The company plans to report its results for the year in-full on 5 December.

PCF Group’s shares were down 2.82% at 36.50p at 0838 BST.