Vanquis Banking returns to profit in Q3

Lender Vanquis Banking Group said on Tuesday that it had returned to profit during the third quarter on the back of cost cutting actions.

Vanquis stated that it now expects to deliver adjusted pre-tax profits of £25.0m to £30.0m for the three months ended 30 September, although it noted that the exact figure remained subject to "a range of external variables".

In light of its "profitability profile" and the 5.0p per share dividend paid for the first half, Vanquis also said any H2 dividend payment was "not expected to be more than 1.0p per share".

The London-listed group said it return to profitability was a result of product price increases, a "simplified" operating model, and a reduction in its net interest margin to an expected 17-18%.

Chief executive Ian McLaughlin said: "We have worked at pace to undertake a detailed operating review of the group. We have scrutinised every cost centre and product line. As a result, we have taken action to stabilise our NIM, significantly reduce our cost base, and put ourselves in a position to clarify guidance for our year-end PBT."

As of 0830 BST, Vanquis shares were up 4.48% at 121.20p.

Reporting by Iain Gilbert at Sharecast.com