LONDON, March 27 (Reuters) - Vanquis Banking Group on Wednesday said it was resetting its business, highlighting the challenges faced by Britain's smaller banks, after reporting a 4.4 million-pound ($5.55 million) loss before tax for 2023.
Shares in Vanquis had tumbled as much as 45% earlier this month after it issued a profit warning and said it would take steps to transform its offer to its core target market, which includes borrowers under financial pressure.
"We do have a period of hard work and change ahead of us. It is still early days, but we are making progress," Vanquis Banking Group's CEO Ian McLaughlin said in a statement.
It expects to return to "modest lending growth" from the start of the second quarter.
So-called challenger banks like Vanquis, seeking to nibble at the dominant market share of the "Big Four" lenders such as NatWest and HSBC, have struggled to make headway and have come under pressure to consolidate.
Vanquis said it maintained a core tier 1 capital buffer of 20.5%, within the group's updated target range of 19.5 to 20.5%.
"Today's results and strategy seminar highlight the considerable challenges we are managing as we reset our business," McLaughlin said.
After a first half loss in 2023, Vanquis generated a profit before tax of 30.4 million pounds in the second half, reflecting cost management actions, including cutting 360 jobs, and release of 74.5 million pounds in impairment provisions, the bank said.
Vanquis proposed paying a final dividend of 1 pence per share for 2023, subject to regulatory approvals.
Vanquis Banking (VANQ)
HSBC Holdings (HSBA)