Vanquis Banking Group resets strategy after 2023 loss

Vanquis Banking Group: United Kingdom-based Vanquis Banking Group has announced a strategic reset after a challenging year, marked by a loss of £4.4 million before tax in 2023. The British bank, targeting borrowers under financial strain, experienced a significant setback with its shares plunging up to 45 per cent following a profit warning earlier this month.

CEO Ian McLaughlin acknowledged the road ahead, stating, "We do have a period of hard work and change ahead of us. It is still early days, but we are making progress." Vanquis aims to initiate "modest lending growth" starting from the second quarter.

Challenger banks like Vanquis, attempting to compete with the established "Big Four" lenders, including NatWest and HSBC, have faced challenges in gaining market traction and have been under pressure to consolidate.

Despite the setbacks, Vanquis maintained a core tier 1 capital buffer of 20.5 per cent, falling within the updated target range of 19.5 per cent to 20.5 per cent. McLaughlin emphasised the significant challenges faced as they reset their business strategy.

Following a first-half loss in 2023, Vanquis rebounded in the second half, reporting a profit before tax of £30.4 million. This turnaround was attributed to strategic cost management measures, including the reduction of 360 jobs, and the release of £74.5 million in impairment provisions.

Vanquis proposed a final dividend of 1 pence per share for 2023, pending regulatory approvals. The bank's efforts to recalibrate its operations reflect the broader challenges encountered by smaller banks in the competitive British banking landscape.

(With Reuters inputs.)