UK's Vanquis Banking returns to profit in 2025 on higher interest, lower costs

Vanquis Banking

26/02/2026 07:18

Overview

UK bank's FY25 returned to profitability with £8.3 mln pretax profit

Gross customer interest-earning balances grew 22%, driven by mortgages and credit cards

Operating costs fell 33% due to transformation savings and lower complaint costs

Outlook

Vanquis expects 2026 gross customer interest-earning balances to exceed £3.3 bln

Company projects 2026 NIM at approximately 15.5%

Vanquis anticipates low double-digit ROTE in 2026

Result Drivers

BALANCE GROWTH - Gross customer interest-earning balances increased 22%, driven by growth in Second Charge Mortgages and Credit Cards

COST MANAGEMENT - Operating costs fell 33% due to transformation savings and lower complaint costs

CREDIT QUALITY - Credit quality remained strong with a reduction in cost of risk, supporting 5% growth in risk-adjusted income

Company press release: ID:nRSZ4418Ua

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
FY Total Income
GBP 454.90 mln
FY Net Income
GBP 8.70 mln
FY Net Interest Income
GBP 418.40 mln
FY Pretax Profit
GBP 8.30 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

The average consensus recommendation for the consumer lending peer group is "buy"

Wall Street's median 12-month price target for Vanquis Banking Group PLC is GBp145.00, about 14.9% above its February 25 closing price of GBp126.20

The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)