* U Money to trade on AIM in October
* Morses shares to be delisted
* Digital change necessitates realignment - Morses
(Adds background, details)
Aug 13 (Reuters) - British sub-prime lender Morses Club
announced an overhaul of its business on Friday that
includes forming a holding company called U Money and listing
new shares under that name.
Morses, which lends to people who struggle to obtain loans
from mainstream banks, said once U Money is formed it will run
its company as two distinct business - one its home-collected
credit operations under the Morses Club name, and the other its
digital lending unit as Shelby Finance.
The move comes as Morses' rivals Provident Financial
and Non-Standard Finance scale back their businesses due
to intense regulatory scrutiny in the sector, under fire for
charging high interest rates on loans to financially vulnerable
people.
Complaints against the sector exploded during the pandemic,
pushing sub-prime lender Amigo towards insolvency while
Provident closed its doorstep lending business.
Morses, which has a 130-year history, said shareholders will
get one U Money share for each Morses share they hold. U Money
stock is then expected to start trading on London's junior AIM
market on Oct. 12.
"The recent acceleration of the group's digital
transformation ... necessitates the realignment of the group's
structure to allow it to better facilitate the ongoing
development of the group's digital strategy," Morses said.
As in many sectors, an accelerated move to digital during
the pandemic lockdowns has seen Morses ramp up its presence
online. The lender said 65% of all lending was now cashless in
its home-collected credit unit, while customer numbers in its
digital division have jumped by 80% since the start of the
financial year.
(Reporting by Muvija M in Bengaluru
Editing by Rachel Armstrong and David Holmes)