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PCF reports 24% increase in new business originations

Tom Belger | 07:30 Wednesday 6th December 2017

PCF Group PLC has announced that new business originations have increased to £846m for the year ended 30th September 2017 .

The specialist bank saw a 24% increase on the £68.4m of new business originations reported in 2016, while it recorded portfolio growth of 20% to £146m, compared with £122m in 2016.

PCF Bank commenced banking operations on 27th July 2017 and has received new customer deposits of £53m up to 30th September 2017.

The bank also revealed that underlying profit before tax was up 25% to £5m, but this was before the deduction of £1.4m of bank set-up costs.

PCF also raised £10.5m of new equity in April 2017.

“Our first steps as a bank have been very encouraging,” said Scott Maybury, chief executive of PCF Group (pictured above).

“We have successfully launched our savings proposition and the more competitive prime lending terms have been well received.

“In the short period from commencing operations as a bank to the end of the financial year, these successes have provided the momentum to deliver profits for 2017 ahead of market expectation and provide a strong start to our new financial year.”

Scott said the strong growth in originations had been driven by its business finance division and the launch of its new competitive prime terms.

“More than half of our total originations in the year were for business-critical assets for small companies, sole traders and partnerships.

“SME lending increased by 45% in the year (2016: 22%).

“As at 30th September 2017, the business finance portfolio was £73m (2016: £52m) and the consumer motor portfolio was £72m (2016: £70m).”

Looking towards 2018, Scott said its initial focus will be to broaden its existing addressable markets and expand its lending into the prime segments of those market via access to a cheaper cost of funds.

Additionally, the banking operations will be extended to offer a range of deposit products to corporate customers, broadening its market appeal.

PCF is initially targeting an organic portfolio of £350m, while its longer-term objective is a lending portfolio of £750m within five years.

“This has been a year of significant achievement, marked by our successful arrival as a new entrant bank,” added Tim Franklin, chairman of PCF.

“These strong results are underpinned by excellent organic portfolio growth and a record-low impairment rate.

“The quality of our portfolio and the operational platform we have built provides the ideal foundation to deliver on a strategy of accelerated growth through expansion within our existing lending markets and asset diversification through acquisition.”

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