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Provident Financial closes Yes Car Credit business

14th December 2005

UK consumer lender Provident Financial has announced that it is to shut its Yes Car Credit business with the loss of over 800 jobs. The move follows a strategic review of the business' future, after which Provident concluded it was no longer viable.

Talks with possible buyers came to nothing, leaving Provident little option but to shut the firm. Yes is likely to record a pretax trading loss of around GBP24 million, though total losses from one off charges and closure costs are likely to increase this figure closer to GBP140 million, Provident said.

In a trading statement, Provident said that its overall business, without Yes Car Credit, would probably not meet profit forecasts, with earnings coming in around 5% below market expectations. This is despite the company's home credit arm performing broadly in line with expectations.

Provident is co-operating with the Competition Commission's inquiry into the UK home credit sector and has responded fully to the recently published emerging thinking document. The firm said that the commission's own research confirmed high levels of satisfaction among customers and that relationships between agents and customers were good and businesslike.

Meanwhile, Vanquis Bank has continued to grow its cardholder numbers and customer receivables during the second half, despite tightening its underwriting criteria. Vanquis is expected to move into profit in 2007.

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