Vanquis shares jump after recovery from complaints storm
Shares in Vanquis Banking Group rose on Wednesday after the firm said it had swung back into profitability following a major blow from complaints in 2024.
The London-listed bank’s stock was up nearly seven per cent as markets opened, trading above 75p.
The Bradford-based lender recorded £2bn in net receivables, the total money expected to be repaid to a company by its customers, for the first quarter – a 6.7 per cent jump from the same period in 2024.
Complaint costs were “in line with expectations” for the first three months of the year, the bank said, and it “did not experience a significant spike in complaint volumes submitted to the Financial Ombudsman Service (FOS) ahead of the revised fee structure”.
The FOS altered its fee structure to include charges for professional representatives, such as claims management companies, who bring complaints on behalf of customers. Lenders fees have also reduced to £475 per case from £650 for cases not upheld.
Vanquis in legal action over complaints
Ahead of the changes, Vanquis’ complaints costs soared 66 per cent to £47.4m, with FOS fees increasing to £24.8m from £8.1m.
The costs came as net interest income fell five per cent to £420m in 2024 and total income dropped six per cent to £458.5m.
The firm’s total complaints dwarfed its peers, with Vanquis leading the pack for grievances in the second half of 2024 at 17,614. Newday trailed behind at 8345 and Ford’s FCE bank came in third at 6530.
Vanquis’ spike was driven by a surge in complaints from the Claims Management Company (CMC).
The bank said in its statement on Wednesday: “Legal proceedings are ongoing against the CMC responsible for the highest volume of unmerited claims in recent years.”
The group’s net interest margin – a key metric measuring a bank’s profitability from lending – shrunk 1.1 per cent to 17.8 per cent since the first quarter of 2024. It remained flat quarter-on-quarter.
Ian McLaughlin, Vanquis’ chief executive, said: “Vanquis’ strategic delivery remains on track. The Group returned to profitability and grew gross customer interest earning balances, building on the momentum shown during the fourth quarter of 2024.
He added: “Vanquis plays an important role in UK banking, and I am pleased with the momentum we are building. We remain focused on supporting our customers while delivering sustainable and profitable growth for all stakeholders.”