“The strategy to diversify our asset classes and income streams is proving a great success”

Scott Maybury, Chief executive

What it does:

PCF Group Plc (LON:PCF), which became a fully operational bank in July 2017, specialises in motor finance and loans for businesses.

It lends to consumers and small and medium-sized companies wanting to buy cars, commercial vehicles, engineering equipment, motorhomes and horse boxes.

The bank recently extended its reach to the broadcast and media industry by agreeing to buy Azule Limited for up to £5.6mln.

How it’s doing

In early March, PCF said business origination in the five months to the end of February was up 30% year-on-year.

The quality of originations has been maintained with more than 79% of originations being in the lender’s prime credit grades, up from 76% in the corresponding period a year earlier.

The lending portfolio has grown by 55% to more than £395mln as at the end of February 2020 (2019: £255mln) and this is supported by retail deposits of £346mln (2019: £202mln).

The company’s consumer motor finance offering was launched in late January of this year after a trial period and volumes for February are very encouraging, with consumer motor lending up 80% year-on-year.

Business finance volumes in the current financial year increased 5% from a year earlier while the bridging property finance portfolio as at 29 February 2020 was £21mln, having only commenced business this time last year.

For the 12 months to September 2019, loans outstanding rose 55% to £339mln while profits climbed by 54% to £8mln.

The bank said of its £276mln new loans during the year almost three-quarters were in its top four credit grades, which was up four percentage points on the year before.

Broadcast and media specialist Azule, acquired at the end of 2018, chipped in £54mln of new business and more than expected.

Retail deposits totalled £267mln (2018: £191mln) with over 6,250 retail deposit customers (2018: 4,500)

Dividend for the year rose by 33% to 0.4p.

Interview: chief executive Scott Maybury

Inflexion points

  • PCF want loans of £750mln by 2022 and £1bn in the ‘medium-term’.
  • Lending portfolio nearly £400mln
  • Economic backdrop improves if Brexit is resolved