REG - H&T Group PLC - Update on regulatory review into HCST lending

H & TAnnouncement

04/04/2022 07:00

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RNS Number : 0372H  H&T Group PLC  04 April 2022

H&T Group plc

("H&T" or "the Group" or "the Company")

 

Update in respect of regulatory review into high-cost short term lending

 

H&T Group plc announced on 18 November 2019 that it was working closely
with the Financial Conduct Authority (FCA) to undertake via a skilled person,
a review of the lending processes, credit worthiness and affordability
assessments within its unsecured high-cost short term (HCST) loans business
between April 2014 and October 2019 ("the review").

 

A methodology for conducting the required past book review was developed in
close collaboration with the skilled person. Following an initial review by
the FCA, "outcomes testing" was undertaken by the skilled person. After
further review by the FCA and subsequent development of the methodology, the
FCA has confirmed that H&T may now proceed to implementation of the past
book review and the resulting customer redress arrangements.

 

Following application of the review methodology, it is considered that a total
of c.9,800 HCST loans to c.8,000 customers should not have been granted.
This represents 11.5% of HCST loans and 12.6 % of HCST customers during the
period. Redress will be paid in respect of these loans in accordance with the
methodology, including statutory interest up to 31 March  2022, taking
account of any withholding tax.

 

In total, the cost of the redress will amount to £2.1m, of which £1.6m will
be paid directly to customers and £0.5m will be by way of an adjustment to
the balance of current outstanding loans. On average, eligible customers will
receive redress amounting to £264.

 

Customers who are eligible to receive redress either in the form of cash or
balance adjustment will be contacted directly, beginning in April 2022. The
process is expected to be completed within 12 months.

 

A provision of £2.1m was raised in the Group's financial statements for the
year ending 31 December 2021, to cover the cost of this redress. In addition,
it is anticipated that professional, operational and implementation costs
relating to the review and the redress programme will amount to approximately
£0.6m. This has been fully provided for in previous accounting periods.

 

Chris Gillespie, chief executive of H&T said:

 

"The Board of H&T is very aware of the concerns and uncertainly that this
review has caused for all stakeholders. We are pleased that the review is now
concluded and that the majority of HCST loans granted by H&T are
considered to have been lent responsibly.

 

"Customers whose loan should not have been granted and who are due redress,
will be contacted directly and we will endeavour to complete the redress
programme as quickly as we can, so as not to prolong the uncertainty further.

 

"H&T is committed to providing services which maintain the highest
standards of customer care and regulatory compliance, and we have co-operated
fully and constructively with the FCA throughout this review. High cost short
term unsecured lending no longer forms part of the Group's product offering."

 

END

 

 

Enquiries:

H&T Group plc

Tel: 020 8225 2797

Chris Gillespie, Chief Executive

Diane Giddy, Chief Financial Officer

 

Shore Capital Ltd (Nominated Adviser and Broker)

Tel: 020 7408 4090

Stephane Auton/ Iain Sexton (Corporate Advisory)

Guy Wiehahn/ Chloë Booker-Triolo (Corporate Broking)

 

Haggie Partners (Public Relations)

Tel: 020 7562 4444

Damian Beeley

 

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