(Provident corrects that an ordinary dividend will be paid out of adjusted ongoing earnings, not pretax profit)
(Alliance News) - Provident Financial PLC on Thursday said it may resume dividends if trading conditions continue to improve between now and the end of 2021.
Provident Financial, whose last payout was in respect to 2019, said trading in the third quarter of 2021 "improved significantly".
The Bradford, England-based lender said it benefited from better market conditions.
"Subject to these improvements continuing on a similar trajectory until the end of the year, the board would consider declaring an ordinary dividend pay-out of approximately 30% of adjusted ongoing earnings in respect of FY'21," Provident Financial said.
Adjusted ongoing earnings is defined by the company has post-tax profit before any losses related to the Consumer Credit division, amortisation and exceptional items.
"The group remains conservatively positioned for any changes to the UK unemployment rate which occur as a result of job support schemes closing at the end of September. The early indication from our analysis of customer data is that the end of furlough is likely to have a lower impact on unemployment than previously thought."
Provident Financial said it will review its coverage levels, potentially with a view of releasing provisions.
The company added that the closure of its Consumer Credit Division progressed in line with expectations. It still anticipates closure costs of up to GBP100 million.
Shares in the company were 3.1% higher at 326.40 pence each in London on Thursday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
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