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    NSF   GB00BRJ6JV17

NON-STANDARD FINANCE PLC

(NSF)
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NSF to shut guarantor loans unit amid British sub-prime lender woes

06/30/2021 | 05:40am EDT

* NSF plans to close guarantor loans division

* Shares slide 12% in morning trade

* Co slumps to annual loss vs year-earlier profit

June 30 (Reuters) - Non-Standard Finance said it plans to close its guarantor loans division, the latest British sub-prime lender forced to scale back because of a sharp increase in complaints and intense regulatory scrutiny.

NSF, whose shares slumped 12% after results showed an annual loss and steep costs, said it will place its guarantor loans division into a managed run-off, and eventually shut it down.

The business accounted for about a quarter of NSF's total loan book, which stood at 258.2 million pounds ($357.19 million)by the end of 2020 - sharply lower than the pre-COVID level of 361.6 million pounds.

"Having completed a detailed review of the group's guarantor loans division and its prospects, the Board has concluded that shareholder interests will be best served by placing the division into a managed run-off and ultimately closing the business," NSF boss John van Kuffeler said.

NSF's plans come after larger rival Provident Financial exited the home credit market altogether, while another guarantor lender Amigo is facing potential insolvency after a surge in complaints against it.

NSF said it has raised concerns with regulators regarding certain Claims Management Companies (CMCs) which seem to be lodging large numbers of claims without proper authority from customers or by using customer data obtained without authorisation.

MUCH UNCERTAINTY AHEAD

As the number of lenders shrink and the health crisis leads to an increase in people with poor credit ratings, experts expect the gap in the market to let illegal lending to flourish.

Subprime lenders have been in the regulatory crosshairs for more than a decade due to sky-high interest rates charged on people struggling to get by.

NSF reiterated that it plans to raise 80 million pounds once regulatory issues are resolved. It slumped to a pretax loss of 35.2 million pounds for 2020, compared to a profit of 14.7 million pounds a year earlier.

Its exceptional costs increased to 97.8 million pounds from 80.6 million pounds, including a charge of 15.4 million pounds to account for the estimated costs of a redress programme.

Goodbody analyst John Cronin said there was "much uncertainty ahead" over whether the capital raise could be carried out and on what terms, as well as over the prospects for a return to profitability in the medium term. ($1 = 0.7231 pounds) ($1 = 0.7229 pounds) (Reporting by Muvija M in Bengaluru; editing by Carolyn Cohn)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AMIGO HOLDINGS PLC -0.64% 10.82 Delayed Quote.28.05%
NON-STANDARD FINANCE PLC 5.00% 3.675 Delayed Quote.15.93%
PROVIDENT FINANCIAL PLC 0.29% 350.8 Delayed Quote.14.27%
All news about NON-STANDARD FINANCE PLC
08/31NON STANDARD FINANCE : FTSE lender Non-Standard Finance's chief executive departs
AQ
08/31NON STANDARD FINANCE : CEO Steps Down; CFO Named Successor
MT
08/31Doorstep lender NSF shakes up top management ahead of capital hike
RE
08/31NON STANDARD FINANCE : promotes CFO Gillespie to group CEO
RE
08/31Non-Standard Finance plc Announces Executive Changes
CI
08/31Non-Standard Finance plc Announces Resignation of John Van Kuffeler as Director
CI
08/13UK supbrime lender Morses Club to relist as 'U Money'
RE
06/30NSF to shut guarantor loans unit amid British sub-prime lender woes
RE
06/30NON STANDARD FINANCE : Earnings Flash (NSF.L) NON-STANDARD FINANCE Reports FY20 Loss GBX-4..
MT
06/30NON STANDARD FINANCE : Earnings Flash (NSF.L) NON-STANDARD FINANCE Posts FY20 Revenue GBP1..
MT
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Financials
Sales 2021 139 M 190 M 190 M
Net income 2021 -28,0 M -38,3 M -38,3 M
Net Debt 2021 - - -
P/E ratio 2021 -
Yield 2021 -
Capitalization 11,5 M 15,7 M 15,7 M
Capi. / Sales 2021 0,08x
Capi. / Sales 2022 0,08x
Nbr of Employees 939
Free-Float 52,8%
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Mean consensus SELL
Number of Analysts 1
Last Close Price 0,04 
Average target price
Spread / Average Target -
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Managers and Directors
Jono Gillespie Group Chief Executive Officer & Director
Charles Henry Gregson Non-Executive Chairman
Niall Scott Kilgour Booker Senior Independent Non-Executive Director
Toby Westcott Non-Executive Director
Peter Forbes Michael Reynolds Director-Investor Relations & Communications
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