Shares in Vanquis Banking Group PLC, the former Provident Financial (LSE:PFG), tumbled 24.5% to 136.6p after the company announced a swing to losses in the first half.
An adjusted loss before tax of £5.5mln was made, compared to a £54.3m profit before tax a year ago.
This reduction in profitability reflected impairment charges increasing to £85.6mln, with these expected credit losses associated with the acceleration in receivables growth to 26% in the half.
Higher-than-expected inflation and associated interest rate increases raised operating and funding costs.
So, despite the growth in receivables, net interest margin was compressed to 16.3% from 18.0% and net interest income was reduced 5% to £201.9mln.
Management had previously guided to a broadly stable net interest margin this year of around 21% but now expects this to be “upwards of circa 18%”.
Despite making a loss, the company maintained its interim dividend at 5.0p per share.
Chief executive Malcolm Le May oversaw his final set of results and hands over to successor Ian McLaughlin, who joined the business in July.