(Alliance News) - Vanquis Banking Group PLC on Tuesday said it returned to profit during the third quarter amid a "resilient" sector, and said recent "intense" changes are already improving results.
The Bradford, England-based lender said that during the third quarter, management took "immediate action" to support its net interest margin and reduce costs.
Vanquis said the new measures included a simplified operating model, expected to achieve around GBP60 million in cost reductions next year, and product price increases to "reflect the rising interest rate environment".
It has also commenced a "broader strategy review" to more effectively segment customers throughout the fourth quarter, with completion expected by the end of January.
"We have worked at pace to undertake a detailed operating review of the group," said Chief Executive Officer Ian McLaughlin. "We have scrutinised every cost centre and product line."
Consequently, Vanquis said it returned to profit during the period, and expects to deliver between GBP25 million and GBP30 million in adjusted pretax profit for 2023. It anticipates an exit net interest margin of 17% to 18%, supported by the above price increases.
The company does not expect to declare a dividend exceeding 1.0 pence per share for the second half of the year, compared with the 5.0p dividend paid for the first half.
Overall, Vanquis said the latest quarter was "a period of intense change", but that those changes "are already starting to deliver improved results."
Next year, Vanquis intends to maintain focus on "key drivers of profitability", including the resumption of "disciplined, returns-focused growth" and continued investment in its customer proposition and technology platform.
McLaughlin commented: "We have strong foundations from which to deliver value for our customers and shareholders, based on a coherent group structure and differentiated access to retail funding."
He added that the ongoing strategic review "will enable us to become the outstanding customer champion in our target market segment and deliver sustainable, profitable growth based on our deep understanding of, and commitment to, our customer base."
Shares in Vanquis were up 7.4% at 124.60 pence in London on Tuesday.
By Emma Curzon, Alliance News reporter
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Vanquis Banking (VANQ)