Scott Maybury, chief executive of PCF Group Plc (LON:PCF), said the specialist lender’s most recent performance exhibited an "encouraging combination of operational resilience, cautious lending and continuing profitability”.
His comments came alongside the latest trading statement, in which investors were told PCF had “progressively tightened” risk credit appetite, meaning the prime lending for the year would be 83% of the total, up from 74% a year earlier.
“The decision to focus on originating entirely prime quality lending will result in some NIM [net interest margin] compression,” PCF explained.
“However future operating income and our cost to income ratio will remain well-positioned by maintaining portfolio growth.”
Against a tough market backdrop, the company said it had registered a small but increasing share of the markets in which it operates.
The portfolio will show growth of 30% this year (2019: 55%) with the rate slowing to around 9% in the second half, a period affected in its entirety by the COVID-19 pandemic, the company said.
PCF estimates by the year-end its loans will total at least £435mln, up around £100mln year on year.
It has worked with companies and people struggling by offering what’s called forbearance on what is owed (time to pay). In a positive development, PCF said forborne loans by value currently represent 12% of its portfolio, down from 32% in early June.
“This is as a result of our expeditious and appropriate response to the issue and our use of automation to efficiently deal with customer requests,” it added.
“We are extremely pleased with this progress, however, we remain ready to assist customers further should the pandemic be prolonged and the economy continue to deteriorate.”
PCF said it continued to manage capital and liquidity to maintain a surplus position “ahead of our normal risk appetite”.
“The near-term outlook for the economy may remain uncertain, however, we have shown we have the resources and experience to steer a balanced course through the current downturn,” said CEO Maybury.
“I have confidence that this downturn will only slow our progress and we can emerge strongly to expedite growth and returns."
In the same announcement, it said it has appointed Nick Price as interim chief financial officer.