PCF Group PLC Launch of PCF Bank and retail deposit operations (4344L)

TIDMPCF

RNS Number : 4344L

PCF Group PLC

19 July 2017

19 July 2017

PCF Group plc

("PCF", the "Bank" or the "Group")

Trading Statement

Launch of PCF Bank and retail deposit operations

The Board is pleased to report that on 18 July 2017 the Bank received notification from its dual regulators, the Prudential Regulation Authority and the Financial Conduct Authority, that the regulatory restrictions of the bank mobilisation period have been lifted and it can now commence deposit taking activities as a fully-operational bank. The Group is now adopting the trading style of PCF Bank.

Customers can expect a range of deposit products to be available online and in best-buy publications in the very near future. A typical 1 year savings product will offer interest rates of 1.7%, with the account opening process taking as little as ten minutes as a result of our leading technology and focus on customer service.

This milestone marks the successful completion of a three-year project and the transformation of the Group from a finance house to an authorised bank. It is a great testament to the team at PCF that the mobilisation process has been concluded within seven months whilst also delivering organic growth and increased profitability in the core business. New business originations in FY17 Q3 were up 20% on the corresponding quarter last year, with the quality of the loan book further improved with the introduction of prime business trials.

Given the Group's positive trading in FY17 Q3, the Board now expects the Group's performance for the year ending 30 September 2017 to be slightly ahead of its previous expectations for profitability and portfolio quality.

The launch of retail deposit taking operations will coincide with a number of new business initiatives, utilising the cheaper cost of funds, to expand the Group's addressable lending market and thereby provide a significant increase in scale, with a target portfolio of GBP350m in three years and GBP750m in five years.

Scott Maybury, CEO, commented: "This is the culmination of three years of hard work for everyone within the Group. The potential upside is considerable, as we currently have a relatively small market share and will now be able to access cheaper funding and lend into more prime segments of the market. Our organic growth proves that the model works, and the launch of PCF Bank will allow us to accelerate that growth over the next 3-5 years.

"The consumer market for used vehicles and the SME market for vehicles, plant and equipment remain robust and our credit criteria remain appropriately judged for the uncertainties of the current political and economic environment.

"PCF Bank's access to retail deposits will allow us to provide our broker network with an even wider and more competitive range of rates, and along with our new business initiatives, will ensure that when those deposits come in we are able to deploy that capital quickly and efficiently."

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For further information, please contact:

 
 PCF Group                                Tel: +44 (0) 
  Scott Maybury, Chief Executive           20 7222 2426 
  Officer 
  Robert Murray, Managing Director 
  David Bull, Finance Director 
 Tavistock Communications                 Tel: +44 (0) 
  Jos Simson / Niall Walsh                 20 7920 3150 
 Panmure Gordon (UK) Limited              Tel: +44 (0) 
  Atholl Tweedie / Adam James              20 7886 2500 
  - Corporate Finance 
  Charles Leigh-Pemberton - Corporate 
  Broking 
 Stockdale Securities                     Tel: +44 (0) 
  Robert Finlay / Richard Johnson          20 7601 6100 
  - Corporate Finance 
  Henry Willcocks - Corporate 
  Broking 
 

About PCF Group plc (www.pcf.bank)

Established in 1994, PCF Group plc is the AIM-quoted parent of the specialist bank, PCF Bank Limited. With the advent of the Bank the Group now has the scale to increase its lending portfolio size significantly, with target portfolio sizes of GBP350m in 2020 and GBP750m in 2022. The Group will retain its focus on portfolio quality, and has the capacity to lend increasingly to prime segments of the finance market.

PCF Bank will offer retail savings products for individuals and will then deploy those funds through its two lending divisions:

   --      Consumer Finance which provides finance for motor vehicles to consumers; and 
   --      Business Finance which provides finance for vehicles, plant and equipment to SMEs. 

The Group has a track record of strong financial performance and an efficient and scalable business model, with significant room to grow. Utilising its technologically advanced platform, the Bank will provide both depositors and borrowers with a high level of service and a straightforward, simple range of products tailored to suit their needs.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 19, 2017 02:00 ET (06:00 GMT)