Vanquis Banking Group PLC · LSE:VANQ
Vanquis Banking — Provident Financial — FY1999 Earnings Presentation
59 slides from Vanquis Banking's earnings presentation, 2000
Slide 1: Provident Financial
PROVIDENT FINANCIAL
Slide 2: Full year results, year ended 31 December 1999
Provident Financial Full year results Year ended 31 December 1999 = | PROVIDENT kd FINANCIAL
Slide 3: Group strategy
Provident Financial Group strategy To be a leading international provider of financial services to lower income households = | PROVIDENT kd FINANCIAL
Slide 4: Countries of operation
Provident Financial > UK > Irish Republic > Poland > Czech Republic > South Africa
Slide 5: Customers by business
Provident Financial 1.56m UK home credit 0.98m Motor insurance 0.15m International home credit
Slide 6: EPS (p)
Provident Financial 43.15 +7.6% 40.12 34.77 29.31 25.17 20.32 15.72 9.61 10.68 8.55 9.33 89 90 91 92 93 94 95 96 97 98 99 EPS (p)
Slide 7: Group customer numbers up to 2.7m
Provident Financial > Group - customer numbers up to 2.7m +12% > UK home credit - continued growth - actions to stabilise bad debt
Slide 8: International, insurance and capital
Provident Financial > International - customer numbers up from 18,000 to 149,000 - profit in 2001, year ahead of plan > Insurance - strong growth - record profits > Capital - 5.2 million shares repurchased
Slide 9: Key results highlights
Provident Financial Customers up to 2.7m + 12% Turnover up to £582.6m + 15.1% Like for like profit up to £155.0m + 8.5% Earnings per share up to 43.15p + 7.6% Dividend per share up to 24.8p + 10.2%
Slide 10: Profit before tax by segment
Provident Financial 1998 1998 1999 reported like for like UK home credit 136.9 133.8 143.9 +7.5% International home credit (4.7) (4.7) (8.4) Motor insurance 19.6 19.6 25.4 +29.6% Central costs (5.9) (5.9) (5.9) Profit before tax 145.9 142.8 155.0 +8.5%
Slide 11: Full year results
Provident Financial Full year results UK home credit = | PROVIDENT kd FINANCIAL
Slide 12: UK home credit
UK home credit > Personal > Flexible > Straightforward > Convenient
Slide 13: Continuing growth potential in UK market
UK home credit > Continuing growth potential in UK market > More agents > More customers > Increase in credit issued
Slide 14: UK home credit customers
UK home credit 11,605 +6.7% 10,879 10,260 9,872 9,138 95 96 97 98 99 As at 31 December
Slide 15: UK home credit agents
UK home credit 1,562 +4.6% 1,494 1,413 1,322 1,207 95 96 97 98 99 As at 31 December
Slide 16: UK home credit customer profile
UK home credit 2% 1% 1% 1% 1% 10% 12% 13% 13% 13% 25% 25% 20% 19% 25% AB C1 C2 31% 31% 34% 35% 30% D E 32% 31% 32% 32% 31% 95 96 97 98 99
Slide 17: UK home credit credit issued growth
UK home credit 847 +5.2% 805 733 670 585 95 96 97 98 99 To 31 December
Slide 18: UK home credit
UK home credit 539 542 +0.6% 507 519 485 95 96 97 98 99
Slide 19: More inexperienced agents and customers
UK home credit > More inexperienced agents > More customers of whom we have less knowledge > Greater workload for field management
Slide 20: Overhead as % of turnover
UK home credit 31% 28% 25% 23% 23% 95 96 97 98 99 Overhead as % of turnover
Slide 21: Wider range of credit products
UK home credit > Wider range of credit products > Some increase in competition > Increased indebtedness > More complex lending environment
Slide 22: Customers using other credit products
UK home credit 49% 46% 43% 97 98 99 Customers using at least one other credit product other than mail order
Slide 23: More complex marketplace and bad debt
UK home credit More complex marketplace Drive Organisational Rapid for cost strain growth efficiency Bad debt
Slide 24: Bad debts as a % of credit issued
UK home credit 8.4 6.8 6.9 6.2 5.9 5.5 5.6 5.1 92 93 94 95 96 97 98 99 Bad debts as a % of credit issued
Slide 25: Collections as a % of maturities
UK home credit 96 9 94.9 95 8 Collections as a % 94 of maturities 7 93 6 92 91.8 5 91 90 4 89 3 95 96 97 98 June Dec 99 99
Slide 26: Bad debt and monies not collected
UK home credit 9 9 8.4 8 8.2 8 % of monies not collected 7 7 Bad debt as a % 6 6 of credit issued 5.5 5 5 5.1 4 4 3 3 95 96 97 98 June Dec 99 99
Slide 27: Growth strategy remains in place
UK home credit > Growth strategy remains in place > Strengthened field force > Improved support for agents > More cautious lending > Collection performance stabilising
Slide 28: UK home credit outlook
UK home credit > Growth in agents and customers > Cautious lending > Stronger field force > Bad debt ratio to stabilise > Slower growth in profits in 2000
Slide 29: Motor insurance
Provident Financial Full year results Motor insurance = | PROVIDENT kd FINANCIAL
Slide 30: Motor insurance: specialist market provider
Motor insurance > Specialist market provider > Cost-effective provision - competitive advantage - good margins > Excellent track record
Slide 31: Motor insurance return on equity
Motor insurance 23% 21% 18% 14% 14% 95 96 97 98 99 Return on equity
Slide 32: Motor insurance profit before tax
Motor insurance 1998 1999 Profit before tax 19.6 25.4 + 29.6%
Slide 33: Motor insurance
Motor insurance 802 595 606 +17.4% 516 477 95 96 97 98 99
Slide 34: Premium increases feeding through
Motor insurance > Premium increases feeding through > Our competitiveness improving > Volumes increasing > Excellent year for profit growth
Slide 35: International home credit
Provident Financial Full year results International home credit = | PROVIDENT kd FINANCIAL
Slide 36: International home credit objectives
International home credit > Year of largest investment - £8.4m > Prove ability to roll out large scale non-UK operation > Build extensive infrastructure in Central Europe > Achieve substantial growth in agent and customer numbers
Slide 37: International home credit
International home credit 3,668 479 Dec 98 Dec 99
Slide 38: International home credit
International home credit 149,369 17,704 Dec 98 Dec 99
Slide 39: Prague
International Home Credit Prague
Slide 40: Czech Republic locations
International home credit 15 1999 1998 3 Locations
Slide 41: Czech Republic locations and employees
International home credit 381 1999 1998 48 15 Locations Employees
Slide 42: Czech Republic agents
International home credit 1,855 1999 1998 381 156 15 48 Locations Employees Agents
Slide 43: Czech Republic customers
International home credit 65,850 1999 1998 5,400 15 381 1,855 Locations Employees Agents Customers
Slide 44: Czech Republic results
International home credit 1998 1999 Customers 5,400 65,850 Credit issued (£m) 0.8 13.0 Loss (£m) (1.1) (2.7) Bad debt % credit issued 1.1% 3.3% Net receivables (£m) 0.4 5.6
Slide 45: Warsaw
International Home Credit n Warsaw
Slide 46: Poland locations
International home credit 10 1999 1998 3 Locations
Slide 47: Poland locations and employees
International home credit 326 1999 1998 78 10 Locations Employees
Slide 48: Poland agents
International home credit 1,562 1999 1998 326 263 78 10 Locations Employees Agents
Slide 49: Poland customers
International home credit 72,434 1999 1998 9,943 10 326 1,562 Locations Employees Agents Customers
Slide 50: Poland results
International home credit 1998 1999 Customers 9,943 72,434 Credit issued (£m) 1.8 15.2 Loss (£m) (1.5) (2.7) Bad debt % credit issued 2.8% 3.5% Net receivables (£m) 0.9 7.0
Slide 51: Pietersburg
International Home Credit Zimbabwe Botswana Pietersburg Mozambique Namibia Swaziland Lesotho
Slide 52: South Africa results
International home credit 1998 1999 Customers 17,704 149,369 Credit issued (£m) 2.8 29.4 Loss (£m) (4.7) (8.4) Bad debt % credit issued 2.3% 3.6% Net receivables (£m) 1.4 13.1
Slide 53: International home credit outlook
International home credit > Substantial growth in Central Europe > Czech Republic in profit during 2000 > Further investment in Poland > Lower start-up loss in 2000
Slide 54: Group prospects
Provident Financial Full year results Group prospects = | PROVIDENT kd FINANCIAL
Slide 55: Prospects: UK and international home credit
Provident Financial > UK home credit - continuing growth in agents and customers - slower profit growth > International home credit - substantial growth - smaller loss in 2000 - profit in 2001
Slide 56: Prospects: motor insurance and group
Provident Financial > Motor insurance - increased profit > Group - good result for year
Slide 57: Steady growth and internationalisation
Provident Financial > Steady growth in UK home credit > Successful internationalisation of home credit - further expansion in Central Europe - over 1m customers in Poland and Czech Republic in 5 years - one further country each year
Slide 58: Profitable motor insurer and broader financial services
Provident Financial > Profitable specialist motor insurer > Broaden range of financial services offered to lower income households - balanceä market testing in 2000
Slide 59: Confident of an exciting and rewarding future
PROVIDENT FINANCIAL Confident of an exciting and rewarding future