REG - Vanquis Banking Grp - Vanquis Banking Group Reporting Changes
11/07/2025 07:00
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RNS Number : 6368Q Vanquis Banking Group PLC 11 July 2025
Vanquis Banking Group Reporting Changes
Vanquis re-presents 2024 results to reflect statutory reporting and simplified
business model
The overall Group consolidated financial position for 2024 remains unchanged
London - 11 July 2025 - Vanquis Banking Group plc ('the Group' or 'Vanquis'),
the specialist bank, today published the re-presentation of its 2024 results
to reflect the following reporting changes:
1. Removal of the reporting of the Group income statement and key metrics
on an adjusted basis, with reporting on a purely statutory basis going
forward.
2. Reporting the Personal Loans portfolio as a discontinued operation.
3. The reallocation of Treasury interest income and interest expense
across products and Corporate Centre.
4. The reallocation of operating costs across products and Corporate
Centre.
There are no changes to the overall Group consolidated financial position for
2024 or legal entity reporting. The Group's income statement, certain key
metrics and product segment reporting have been re-presented to reflect the
above changes.
This re-presentation is a further step in Vanquis' on-going commitment to
enhance disclosures and to provide a more transparent reporting of the Group's
continuing operations by product.
The Group's outlook for the business and financial guidance remains unchanged
and intends to report its interim results for the six months ended 30 June
2025 on 7 August 2025.
This re-presentation document is being released now to enable the market to
assess the Group's half year 2025 performance against 2024 performance on a
comparable basis.
2024 re-presented Group results(1)
Income Statement (£m) FY24 1H24 2H24
Interest income 549.9 276.0 273.9
Interest expense (142.0) (68.7) (73.3)
Net interest income 407.9 207.3 200.6
Non-interest income 38.5 19.5 19.0
Total income 446.4 226.8 219.6
Impairment charges (185.3) (93.0) (92.3)
Risk-adjusted income 261.1 133.8 127.3
Operating costs (399.1) (179.9) (219.2)
Loss before tax from continuing operations (138.0) (46.1) (91.9)
Tax credit 17.4 10.6 6.8
Loss after tax from continuing operations (120.6) (35.5) (85.1)
Profit/(loss) after tax from discontinued operations 1.3 (0.3) 1.6
Statutory loss after tax (119.3) (35.8) (83.5)
Balance Sheet (£m) DEC24 JUN24
Gross customer interest earning balances 2,308 2,252
Average gross customer interest earning balances 2,286 2,296
Gross receivables 2,416 2,361
Net receivables 2,155 2,010
Closing tangible net asset value (TNAV) 359 378
Average tangible equity 377 387
Selected key metrics (%) FY24 1H24 2H24
Asset yield(2) 22.8 23.2 22.4
Net interest margin (NIM)(3) 18.5 18.9 18.1
Total income margin (TIM)(4) 20.2 20.7 19.8
Cost of risk(5) (8.4) (8.5) (8.3)
Risk-adjusted margin (RAM)(6) 11.8 12.2 11.5
Cost: income ratio(7) 89.4 79.3 99.8
ROTE(8) (31.7) (18.6) (45.3)
Selected per share metrics (p)
Basic earnings per share (EPS)(9) (46.7) (14.1) (32.6)
Dividend per share - - -
TNAV per share(10) 140 148
Capital, liquidity and funding metrics DEC24 JUN24
Tier 1 ratio(11) 18.8% 19.8%
Risk weighted assets (RWAs) (£m) 1,835 1,813
High quality liquid assets (HQLA) (£m) 947 717
Liquidity coverage ratio (LCR) 359% 557%
Retail deposits (£m) 2,399 1,912
Retail funding (% of all funding) 92.1% 86.5%
2024 re-presented segmental product performance
FY24 £m Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
Interest income 365.7 133.1 4.8 46.3 549.9
Interest expense (53.2) (31.4) (3.4) (54.0) (142.0)
Net interest income 312.5 101.7 1.4 (7.7) 407.9
Non-interest income 35.0 - - 3.5 38.5
Total income 347.5 101.7 1.4 (4.2) 446.4
Impairment charges (123.9) (60.4) (0.2) (0.8) (185.3)
Risk-adjusted income 223.6 41.3 1.2 (5.0) 261.1
Operating costs (193.5) (80.1) (0.6) (124.9) (399.1)
Profit/(loss) before tax from continuing operations 30.1 (38.8) 0.6 (129.9) (138.0)
1H24 £m Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
Interest income 183.6 69.7 0.2 22.5 276.0
Interest expense (26.9) (15.7) (0.3) (25.8) (68.7)
Net interest income 156.7 54.0 (0.1) (3.3) 207.3
Non-interest income 18.6 - - 0.9 19.5
Total income 175.3 54.0 (0.1) (2.4) 226.8
Impairment charges (63.5) (29.5) - - (93.0)
Risk-adjusted income 111.8 24.5 (0.1) (2.4) 133.8
Operating costs (100.5) (42.8) (0.2) (36.4) (179.9)
Profit/(loss) before tax from continuing operations 11.3 (18.3) (0.3) (38.8) (46.1)
2H24 £m Credit Cards Vehicle Finance Second Charge Mortgages Corporate Centre Total
Interest income 182.1 63.4 4.6 23.8 273.9
Interest expense (26.3) (15.7) (3.1) (28.2) (73.3)
Net interest income 155.8 47.7 1.5 (4.4) 200.6
Non-interest income 16.4 - - 2.6 19.0
Total income 172.2 47.7 1.5 (1.8) 219.6
Impairment charges (60.4) (30.9) (0.2) (0.8) (92.3)
Risk-adjusted income 111.8 16.8 1.3 (2.6) 127.3
Operating costs (93.0) (37.3) (0.4) (88.5) (219.2)
Profit/(loss) before tax from continuing operations 18.8 (20.5) 0.9 (91.1) (91.9)
Credit Cards
£m FY24 1H24 2H24
Total customer numbers ('000) 1,267 1,321 1,267
Gross customer interest earning balances 1,278 1,295 1,278
Average gross customer interest earning balances 1,313 1,339 1,284
Gross receivables 1,310 1,331 1,310
Net receivables 1,150 1,151 1,150
Interest income 365.7 183.6 182.1
Interest expense (53.2) (26.9) (26.3)
Net interest income 312.5 156.7 155.8
Non-interest income 35.0 18.6 16.4
Total income 347.5 175.3 172.2
Impairment charges (123.9) (63.5) (60.4)
Risk adjusted income 223.6 111.8 111.8
Operating costs (193.5) (100.5) (93.0)
Profit before tax contribution 30.1 11.3 18.8
Asset yield (%)(2) 27.9 27.6 28.2
Net interest margin (%)(3) 23.8 23.5 24.1
Total income margin (%)(4) 26.5 26.3 26.7
Cost of risk (%)(5) (9.4) (9.5) (9.4)
Risk adjusted margin (%)(6) 17.0 16.8 17.3
Cost: income ratio (%)(7) 55.7 57.3 54.0
Vehicle Finance
£m FY24 1H24 2H24
Total customer numbers ('000) 110 110 110
Gross customer interest earning balances 765 850 765
Average gross customer interest earning balances 825 851 803
Gross receivables 832 921 832
Net receivables 735 760 735
Interest income 133.1 69.7 63.4
Interest expense (31.4) (15.7) (15.7)
Net interest income 101.7 54.0 47.7
Total income 101.7 54.0 47.7
Impairment charges (60.4) (29.5) (30.9)
Risk adjusted income 41.3 24.5 16.8
Operating costs (80.1) (42.8) (37.3)
Loss before tax contribution (38.8) (18.3) (20.5)
Asset yield (%)(2) 16.1 16.5 15.7
Net interest margin (%)(3) 12.3 12.8 11.8
Total income margin (%)(4) 12.3 12.8 11.8
Cost of risk (%)(5) (7.3) (7.0) (7.7)
Risk adjusted margin (%)(6) 5.0 5.8 4.2
Cost: income ratio (%)(7) 78.8 79.3 78.2
Second Charge Mortgages
£m FY24 1H24 2H24
Total customer numbers ('000) 3.7 0.6 3.7
Gross customer interest earning balances 217 30 217
Average gross customer interest earning balances 69 11 121
Gross receivables 226 32 226
Net receivables 225 32 225
Interest income 4.8 0.2 4.6
Interest expense (3.4) (0.3) (3.1)
Net interest income 1.4 (0.1) 1.5
Total income 1.4 (0.1) 1.5
Impairment charges (0.2) - (0.2)
Risk adjusted income 1.2 (0.1) 1.3
Operating costs (0.6) (0.2) (0.4)
Profit/(loss) before tax contribution 0.6 (0.3) 0.9
Asset yield (%)(2) 7.0 n/m 7.6
Net interest margin (%)(3) 2.0 n/m 2.5
Total income margin (%)(4) 2.0 n/m 2.5
Cost of risk (%)(5) (0.3) n/m (0.3)
Risk adjusted margin (%)(6) 1.7 n/m 2.1
Cost: income ratio (%)(7) 42.9 n/m 26.7
Corporate Centre
£m FY24 1H24 2H24
Interest income 46.3 22.5 23.8
Interest expense (54.0) (25.8) (28.2)
Net interest income (7.7) (3.3) (4.4)
Non-interest income 3.5 0.9 2.6
Total income (4.2) (2.4) (1.8)
Impairment charges (0.8) - (0.8)
Risk adjusted income (5.0) (2.4) (2.6)
Operating costs (124.9) (36.4) (88.5)
Loss before tax contribution (129.9) (38.8) (91.1)
Overview of reporting changes
Group Income Statement and key metrics on a purely statutory reported basis
· As announced with the FY24 results, the Group has transitioned to
reporting solely on a statutory basis. This follows actions taken in 2024 that
resulted in a cleaner, lower-risk balance sheet and improved transparency at
both Group and product levels. Adjusted performance is now expected to closely
align with statutory results.
· Accordingly, the 2024 income statement and key metrics have been
re-presented on a statutory basis, removing adjustments for goodwill
write-offs, transformation and other exceptional costs, and amortisation of
acquisition intangibles.
Personal Loans portfolio as a discontinued operation
Following the announced sale of the Personal Loans portfolio with FY24 results
- completed at the end of 1Q25 - the business has been reclassified as a
discontinued operation. The 2024 results have been re-presented to reflect
this change:
· The operating costs included in the profit or loss after tax from
discontinued operations reflect only those costs directly attributable to the
Personal Loans business.
· The business continued to be reported as discontinued in 1Q25
until the sale completed.
· The 1H25 results will include the gain on sale.
Revised Group segments
· Following the sale of the Personal Loans business, the Group now
comprises four segments: the three core lending products - Credit Cards,
Vehicle Finance, and Second Charge Mortgages - and the Corporate Centre. The
Corporate Centre includes the residual performance of the Retail Savings
business, Treasury results after product allocations, Snoop, and other
immaterial or central items.
Reallocation of Treasury interest income and interest expense across products
To more accurately reflect the interest income and funding costs of each
lending product, the Group has reallocated certain Treasury-related items:
Interest income reallocation
Interest income from the following non-product Treasury items has been moved
from Credit Cards to the Corporate Centre:
· Bank of England (BoE) reserve deposits and UK gilts held in the
Group's Liquid Asset Buffer
· Swaps, collateral management and securitisations
· Non-customer lending facilities to third parties
Interest expense reallocation
To better represent the cost of funding across products:
· Previous interest expense recharges have been replaced by funds
transfer pricing (FTP), allowing for duration matching of assets and natural
hedging across exposures.
· Interest expense related to Tier 2 capital, previously reported
entirely in Corporate Centre, has been partially reallocated to individual
products.
· The cost of the Vehicle Finance securitisation, previously
allocated solely to Vehicle Finance, has been spread across all products,
reflecting shared benefit from the funding structure.
Reallocation of operating costs across products
To better reflect the profitability of each lending product, operating costs
that were not directly attributable and previously held in the Corporate
Centre have been reallocated using two main approaches:
· Business size: Based on the relative size of each business area,
using a blended average of:
o Credit risk-weighted assets (RWAs), to reflect capital consumption
o Total income, to reflect revenue contribution
· Service usage: Based on how much each business area uses specific
services, particularly:
o Aligning staff costs to the business areas that employees support
2024 adjusting and other one-off items
· The 2024 adjusting items - comprising the goodwill write-off,
transformation and other exceptional costs, and amortisation of acquisition
intangibles - in addition to other-one off cost items, have remained within
the Corporate Centre.
· The impact of the Vehicle Finance receivables review, affecting
both income and impairment, has remained within the Vehicle Finance segment.
· These items are identified as notable items on page 11.
Balance sheet and RWAs
· There are no changes to how the balance sheet and RWAs are reported:
o Only customer balances that are directly attributable have been allocated
to the respective lending products.
o Credit and operational risk RWAs are allocated across products based on
customer balances.
o All other balance sheet items and RWAs have remained within the Corporate
Centre.
Re-presentation and re-segmentation bridges
Group
£m FY24 Removal of adjusting items Personal Loans as a discontinued operation
(as reported) FY24
(re-presented)
Interest income 565.4 - (15.5) 549.9
Interest expense (145.4) - 3.4 (142.0)
Net interest income 420.0 - (12.1) 407.9
Non-interest income 38.5 - - 38.5
Total income 458.5 - (12.1) 446.4
Impairment charges (191.0) - 5.7 (185.3)
Risk-adjusted income 267.5 - (6.4) 261.1
Operating costs (302.3) (101.5) 4.7 (399.1)
Loss before tax from continuing operations (34.8) (101.5) (1.7) (138.0)
Exceptional costs (24.1) 24.1 - -
Amortisation of acquisition intangibles (6.2) 6.2 - -
Goodwill write-off (71.2) 71.2 - -
Statutory loss before tax from continuing operations (136.3) - (1.7) (138.0)
Tax credit 17.0 - 0.4 17.4
Loss after tax from continuing operations (119.3) - (1.3) (120.6)
Profit after tax from discontinued operations - - 1.3 1.3
Statutory loss after tax (119.3) - - (119.3)
Selected key metrics (%)
Asset yield 22.7 22.8
Net interest margin (NIM) 18.4 18.5
Total income margin 20.1 20.2
Cost of risk (8.4) (8.4)
Risk-adjusted margin (RAM) 11.7 11.8
Cost: income ratio 88.1 89.4
ROTE (31.7) (31.7)
Selected per share metrics
Basis earnings per share (EPS) (p) (46.7) (46.7)
Credit Cards
Twelve months ended (£m) DEC24 Treasury income re-segmentation Costs re-segmentation DEC24 (re-presented)
(as reported)
Interest income 406.3 (40.6) - 365.7
Interest expense (79.6) 26.4 - (53.2)
Net interest income 326.7 (14.2) - 312.5
Non-interest income 35.3 (0.3) - 35.0
Total income 362.0 (14.5) - 347.5
Impairment charges (123.9) - - (123.9)
Risk adjusted income 238.1 (14.5) - 223.6
Operating costs (185.3) - (8.2) (193.5)
Profit before tax contribution 52.8 (14.5) (8.2) 30.1
Asset yield (%) 27.9 27.9
Net interest margin (%) 24.9 23.8
Total income margin (%) 27.6 26.5
Cost of risk (%) (9.4) (9.4)
Risk adjusted margin (%) 18.1 17.0
Cost: income ratio (%) 51.2 55.7
Vehicle Finance
Twelve months ended (£m) DEC24 Treasury income re-segmentation Costs re-segmentation DEC24 (re-presented)
(as reported)
Interest income 133.1 - - 133.1
Interest expense (38.5) 7.1 - (31.4)
Net interest income 94.6 7.1 - 101.7
Total income 94.6 7.1 - 101.7
Impairment charges (60.4) - - (60.4)
Risk adjusted income 34.2 7.1 - 41.3
Operating costs (42.2) - (37.9) (80.1)
Loss before tax contribution (8.0) 7.1 (37.9) (38.8)
Asset yield (%) 16.1 16.1
Net interest margin (%) 11.5 12.3
Total income margin (%) 11.5 12.3
Cost of risk (%) (7.3) (7.3)
Risk adjusted margin (%) 4.1 5.0
Cost: income ratio (%) 44.6 78.8
Second Charge Mortgages
Twelve months ended (£m) DEC24 (as reported) Treasury income re-segmentation Costs re-segmentation DEC24 (re-presented)
Interest income 4.8 - - 4.8
Interest expense (2.9) (0.5) - (3.4)
Net interest income 1.9 (0.5) - 1.4
Total income 1.9 (0.5) - 1.4
Impairment charges (0.2) - - (0.2)
Risk adjusted income 1.7 (0.5) - 1.2
Operating costs (0.2) - (0.4) (0.6)
Profit before tax contribution 1.5 (0.5) (0.4) 0.6
Asset yield (%) 7.0 7.0
Net interest margin (%) 2.8 2.0
Total income margin (%) 2.8 2.0
Cost of risk (%) (0.3) (0.3)
Risk adjusted margin (%) 2.5 1.7
Cost: income ratio (%) 10.5 42.9
Corporate Centre
Twelve months ended (£m) DEC24 (as reported) Treasury income re-segment- Costs re-segment- DEC24 (pre- removal of adjusting items) Removal of adjusting items DEC24 (re-presented)
ation ation
Interest income 5.8 40.5 - 46.3 - 46.3
Interest expense (21.0) (33.0) - (54.0) - (54.0)
Net interest income (15.2) 7.5 - (7.7) - (7.7)
Non-interest income 3.2 0.3 - 3.5 - 3.5
Total income (12.0) 7.8 - (4.2) - (4.2)
Impairment charges (0.8) - - (0.8) - (0.8)
Risk adjusted income (12.8) 7.8 - (5.0) - (5.0)
Operating costs (64.1) - 40.7 (23.4) (101.5) (124.9)
Loss before tax contribution (76.9) 7.8 40.7 (28.4) (101.5) (129.9)
Exceptional costs (24.1) - - (24.1) 24.1 -
Amortisation of acquisition intangibles (6.2) - - (6.2) 6.2 -
Goodwill write-off (71.2) - - (71.2) 71.2 -
Statutory loss before tax contribution (178.4) 7.8 40.7 (129.9) - (129.9)
Notable items
£m Account line Segment FY24 H124 H224
Goodwill write-off Operating costs Corporate Centre (71.2) - (71.2)
Transformation and other exceptional costs Operating costs Corporate Centre (24.1) (15.5) (8.6)
Amortisation of acquisition intangibles Operating costs Corporate Centre (6.2) (4.2) (2.0)
Vehicle Finance receivables review Income Vehicle Finance (4.5) (3.1) (1.4)
Impairment Vehicle Finance (15.1) (9.7) (5.4)
Other one-off cost items Operating costs Corporate Centre (10.2) (10.2) -
Total notable items (131.3) (42.7) (88.6)
Personal Loans balances and receivables
The Group balance sheet as at 31 December 2024 and 30 June 2024 will continue
to be reported including the Personal Loans receivables, despite the business
being recognised as a discontinued operation. Personal Loans balances and
receivables are summarised below:
Personal Loans (£m) DEC24 JUN24
Total customer numbers ('000) 24 33
Gross customer interest earning balances 49 77
Average gross customer interest earning balances 79 95
Gross receivables 49 78
Net receivables 44 68
Enquiries
Investors and analysts
James Cranstoun, Head of Investor Relations
james.cranstoun@vanquis.com
+44 (0) 7766 937 406
Media
Scott Mowbray, Head of External Communications
scott.mowbray@vanquis.com
+44 (0) 7834 843 384
Victoria Ainsworth, Senior Director (Hawthorn Advisors)
vanquis@hawthornadvisors.com
+44 (0) 7894 995 886
Footnotes
1. The presentation of the income statement in this report is
consistent with that in the Annual Report and Accounts for 31 December 2024,
with the exception of the impact of the sale of the Personal Loans portfolio,
which is now recognised as a discontinued operation and the re-segmentation of
interest income, interest expense and operating costs by product. The
information included in this announcement has not been subject to audit by the
Group's external auditor.
2. Asset yield is calculated as interest income received from
customers for the period as a percentage of average gross customer interest
earning balances for the 6 and 12 months ended 30 June and 31 December using 7
and 13 point month end averages. Group asset yield excludes Personal Loans
average gross customer interest earning balances.
3. Net interest margin is calculated as interest income less interest
expense for the period as a percentage of average gross customer interest
earning balances for the 6 and 12 months ended 30 June or 31 December using 7
and 13 point month end averages. Group net interest margin excludes Personal
Loans average gross customer interest earning balances.
4. Total income margin is calculated as total income for the period as
a percentage of average gross customer interest earning balances for the 6 and
12 months ended 30 June or 31 December using 7 and 13 point month end
averages. Group total income margin excludes Personal Loans average gross
customer interest earning balances.
5. Cost of risk is calculated as impairment charges for the period as
a percentage of average gross customer interest earning balances for the 6 and
12 months ended 30 June or 31 December using 7 and 13 point month end
averages. Group cost of risk excludes Personal Loans average gross customer
interest earning balances.
6. Risk-adjusted margin is defined as risk-adjusted income for the
period as a percentage of average gross customer interest earning balances for
the 6 and 12 months ended 30 June or 31 December using 7 and 13 point month
end averages. Group risk-adjusted margin excludes Personal Loans average
gross customer interest earning balances.
7. Cost: income ratio is calculated as operating costs as a percentage
of total income for the 6 and 12 months ended 30 June or 31 December.
8. ROTE is calculated as statutory profit after tax net of fair value
gains for the 6 and 12 months ended 30 June or 31 December as a percentage of
average adjusted tangible equity for the 6 and 12 months ended 30 June or 31
December. Adjusted tangible equity is stated as equity after deducting the
Group's pension asset, net of deferred tax, the fair value of derivative
financial instruments, net of deferred tax, less intangible assets and
goodwill.
9. Basic earnings per share is calculated as statutory profit after
tax for the 6 and 12 months ended 30 June or 31 December, divided by the
weighted average number of shares in issue.
10. TNAV per share is calculated as closing adjusted tangible net asset
value, divided by the period end number of shares in issue. Adjusted
tangible net asset value is stated as equity after deducting the Group's
pension asset, net of deferred tax, the fair value of derivative financial
instruments, net of deferred tax, less intangible assets and goodwill.
11. The Tier 1 ratio is calculated as the ratio of the Group's Tier 1
capital as a percentage of the Group's risk-weighted assets measured in
accordance with the CRR.
Forward looking statements
This report may contain certain "forward looking statements" regarding the
financial position, business strategy or plans for future operations of
Vanquis Banking Group. All statements other than statements of historical fact
included in this document may be forward looking statements. Forward looking
statements also often use words such as "believe", "expect", "estimate",
"intend", "anticipate" and words of a similar meaning. By their nature,
forward looking statements involve risk and uncertainty that could cause
actual results to differ from those suggested by them. Much of the risk and
uncertainty relates to factors that are beyond Vanquis Banking Group's ability
to control or estimate precisely, such as future market conditions and the
behaviours of other market participants, and therefore undue reliance should
not be placed on such statements which speak only as at the date of this
report. Vanquis Banking Group does not assume any obligation to, and does not
intend to, revise or update these forward-looking statements, except as
required pursuant to applicable law or regulation. No statement in this
announcement is intended as a profit forecast or estimate for any period. No
statement in this announcement should be interpreted to indicate a particular
level of profit and, as a consequence, it should not be possible to derive a
profit figure for any future period from this report.
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