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(Alliance News) - Distribution Finance Capital Holdings PLC on Wednesday reported a larger loan book at the end of the first half of 2023 and said it remains "cautiously optimistic" about its second half performance.
Distribution Finance is a Manchester-based bank providing working capital solutions to dealers and manufacturers across the UK. Shares in the firm were up 1.5% at 35.00 pence on Wednesday morning in London.
The company said its loan book stood at GBP519 million at June 30, up 18% from GBP309 million at the same time a year prior. It noted this was ahead of its expectations as the second quarter of the year is usually weaker.
Distribution Finance noted strong new loan origination in the first half of 2023, up 38% to GBP607 million from GBP439 million the year prior.
The firm's net interest margin continued to perform in excess of its 6% target, influenced by movements in the UK base rates. Distribution Finance said it expects to revert to and maintain its NIM target as base rate reduces over the medium-term.
"Whilst the macro-economic environment has continued to prove challenging this year, we have proven that our products and services play an important role in supporting working capital for dealers and manufacturers. We have increased our lending ahead of seasonal expectations achieving new record loan balances along the way. Our proven retail deposit raising capability has successfully supported our lending growth. We remain cautiously optimistic about our second half performance, despite the general economic uncertainty caused by high interest rates to curb inflation," said Chief Executive Carl D'Ammassa.
The company expects to announce its half-year results during September.
By Heather Rydings, Alliance News senior economics reporter
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