Non-Standard Finance predicts further loan growth post Brexit

Sub prime lender Non-Standard Finance said it saw Brexit as a growth opportunity as mainstream banks tighten their credit further as it reported it's first revenue figures since incorporating in 2014.

In its half year statement to 30 June 2016 the company said its loan book grew to £146.8m before fair value adjustment.

Reported revenue was £29.1m compared with nil in the previous period to reflect the acquisition of Loans at Home last year. Pre-tax losses widened to £4.7m from £0.9 last time.

The company also declared a maiden dividend of 0.3p a share. The 2016 half year results include a full period for Loans at Home and approximately three months of Everyday Loans (including Trusttwo) that completed on 13 April 2016, the company said.

NSF provides loans to around 1.2m customers with low credit scores in its branches or at their homes.

Chief executive John van Kuffeler said loan book growth was in-line with the company's annual target of 20% with customer numbers also growing strongly, adding that NSF was also on track to meet its aim of a 20% return on assets in 2017.

With banks tightening their credit after the UK's decision to leave the European Union, Kuffeler said there were opportunities to drive demand growth.

“While Britain's decision to leave the European Union has prompted significant uncertainty in global financial markets, our businesses have a history of robust performance in times of economic uncertainty," he said.

"Moreover, any tightening of credit by mainstream financial institutions in response to market volatility may present further opportunities for the group as consumers seek alternative sources of credit."

“Since the end of June 2016, each of our businesses has continued to deliver loan book growth and while the important Christmas period lies ahead for Loans at Home, the group's performance to-date underpins our confidence in the full year outlook,” NSF said.

Trusttwo, the part of the business that focuses on the issue of guaranteed loans, along with Everyday Loans has been awarded a full Financial Conduct authority licence.

For the second half of 2016 and 2017, the firm said its two main strategies for growth include further expansion of its existing 36 branches as well as establish a broader product offering to include customers with lower credit scores.

NSF shares rose 9.43% to 66.75p at 1711 BST on Wednesday.