PCF Group PLC boosts loan quality as pandemic eases

What it does:

(), 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

The specialist business bank has “progressively tightened” risk credit appetite, meaning the prime lending for the year would be 83% of the total, up from 74% a year earlier.

In March, it reported that customers in forbearance had dropped to just 5% of its loan book with lending overall rising slightly over the most recent five months.

Since the onset of the pandemic, the specialist bank and lender said it had focused on better quality customers, which had meant a drop in new loans in the five months to 28 February 2021 to £104mln from £127mln a year earlier, but of those, the number in the top four credit grades had risen to 93%.

Total loans outstanding rose to £440mln from £434mln at the end of last September helped by media specialist Azule advancing a loan of £6.9mln for a new video wall in the Disney Studio at Pinewood.

Second-hand car finance was also steady and is now the largest part of the loan portfolio at £179mln, said the update. Customer deposits were steady at £342mln.

What the boss says: Scott Maybury, chief executive

While the outlook remains volatile and the exit route from the pandemic remains uncertain, it is essential that we focus on loan book performance and protecting the strong franchises we have in our markets.

“We remain confident that we are well placed to take advantage of opportunities in more prosperous times.”

Inflexion points

• Easing of coronavirus lockdown
• Loan demand recovers
• Economic backdrop improves back to pre-virus levels