PCF Group PLC (AIM:PCF) said it is focused on returning to profitability after addressing various challenges in the past year and a half for its PCF Bank business.
Alongside results for the six months to 31 March 2022, chief executive Garry Stran said the saw management and financial resource focused on the remediation of the company's control and governance framework, after accounting issues under his predecessor.
"These results reflect the challenges, which the group has now largely addressed. Management's energies and focus can now return to creating and running an efficient and digitalised business, to drive a return to profitability and the creation of enhanced shareholder value over the medium term," Stran said.
Net loans and advances were £321mln in the period, down from £364mln in the second half of last year, while total new business originations were 40% lower at £62mln - although £22mln of which was originated in the month of March.
Origination numbers exclude Azule brokered lending of £15mln in the period that is not included on the balance sheet but generates commission income on the profit and loss statement.
PCF said the focus was on "writing high quality business", with 87% of originations in its top four credit grades, with a strategic change at the end of this interim period, with risk appetite returning to pre-COVID levels.
"This is intended to ensure a more appropriate balance of risk in our new loan originations in order to increase yield."
A statutory loss before tax of £7.5mln was reported, from a profit before tax of £1.4mln a year ago, with the reduction attributed to lower net interest income due to reduced loans and advances and compressed margin, and higher operating expenses, due to remediation and investment spend.
Net interest margin decreased to 5.9% from 6.7%.
On the outlook, the company said that, as the remediation programme reaches maturity in the following financial year, expenses will start to reduce, although transformation-related expenses will remain in the short term.
New business origination volumes are expected to be higher in the second half of the current financial year, although prudence was the watchword.
Stran said the increased levels of originations in March give him "confidence for the future growth prospects of the group" and the move to a "more balanced and appropriate blend of risk in our originations will benefit margin in future periods and in due course lead to an increase in revenues".