Helping everyday people
Vanquis Banking Group plc
Annual Report and Financial Statements 2022
Our Purpose is to help put people on a path to a better everyday life.
We do this by providing customers with opportunities to borrow in a transparent, responsible and sustainable way, so they can live their lives with access to finance.
The Group has been providing financial inclusion, which supports social mobility, to consumers whose needs are not well met by traditional lenders for over 140 years. We lend responsibly and provide tailored products and service propositions to 1.7 million customers throughout the UK.
We want to be the best and most trusted provider of finance to customers not well served by traditional lenders. Our customers who are in the mid cost and near prime markets access our broad range of credit cards, unsecured personal loans and vehicle finance products through the Vanquis and Moneybarn brands, across multiple distribution channels.
Our aim is to put our customers at the centre of everything we do, and we do this by using our strategic drivers of 'People & Culture', 'Growth & Sustainability' and 'Customer & Community' to deliver for them, our colleagues, shareholders and the wider UK community.
Our strategic roadmap
Our Purpose
We're here…
To help put people on the path to a better everyday life
Read more on pages 20 to 21
Our Vision
When we succeed, we imagine a world where…
Everyday people are able to access the financial services they need from us,
no matter where they are on their journey
Read more on pages 20 to 21
Our Mission
To make this happen, we need to become…
The first-choice bank for the UK population who are excluded from
accessing financial services from traditional lenders
Read more on pages 20 to 21
Our Strategy
To achieve this, our strategic focus area are…
People and Culture
Growth and Sustainability
Read more on pages 22 to 23
Customer and Community
Our ESG Priorities
And our ESG priorities are…
Delivering financial inclusion
Putting the customer at
the heart of everything we do, whether we're growing our range of products, reaching new audiences or interacting with everyday people at every stage of their journey with us
Our people and culture
Creating a positive, inclusive and rewarding culture where everyone feels empowered and supported to learn, grow and succeed
Supporting social mobility
Working with our community
partners to improve the
lives of children and young people by providing them with access to education, social and financial inclusion, and economic development opportunities
Meeting our climate
responsibilities
Playing our part in tackling
climate change and
supporting the UK's transition to a low carbon economy by understanding the risks and opportunities that climate change presents to our business and key stakeholders
Read more on pages 36 to 49
Highlights
Customer numbers
1.7m
0.1m
(2021: 1.6m)
Regulatory capital
£678.8m
£27.7m
(2021: £706.5m)
Adjusted profit before tax - continuing operations
£126.6m
£41.2m
(2021: £167.8m)
Operational carbon footprint offset1
100%
(2021: 100%)
Amounts receivable from customers
£1.9bn
£0.2bn
(2021: £1.7bn)
Liquidity
£478.2m
£228.7m
(2021: £706.9m)
Statutory profit before tax - continuing operations
£110.1m
£32.1m
(2021: £142.2m)
Certain alternative performance measures (APMs) have been used in this report (see pages 229 to 234)
1 Not including scope 3 emissions associated with suppliers' and financed vehicle emissions.
Strategic report
- Highlights
- Vanquis Banking Group at a glance
- Investment case
- Chairman's statement
- Chief Executive Officer's review
- Chief Finance Officer's review
- Sustainability overview
- Market overview
- Business model
- Strategy
- Key performance indicators
- Credit Card Division
- Vehicle Finance Division
- Personal Loans Division
- Sustainability
- Section 172(1) statement
- Non-financialinformation statement
- Risk management and principal risks
- Relations with regulators
- Viability statement
Governance
69 Board leadership and Company Purpose 69 Chairman's introduction
to governance
71 Our Board
74 Setting our strategy
76 Promoting long-term sustainable success: Board focus areas during 2022
79 The Board: our culture
82 Stakeholders
82 Stakeholder engagement and decision making
87 Effective engagement with shareholders and stakeholders: investor relations
88 Division of responsibilities
91 Composition, succession and evaluation 91 Board composition
92 Director induction and training
93 Assessing Board performance
- annual Board evaluation
-
Nomination Committee Report 100 Customer, Culture and Ethics
Committee Report
103 Audit, risk and internal control
- Audit Committee Report
- Risk Committee Report 112 Directors' Report
Directors' Remuneration Report
119 Annual Statement by the Chair of the Remuneration Committee
123 Remuneration at a glance
127 Annual Report on Remuneration
Visit: vanquisbankinggroup.com
View: Sustainability Report at www.vanquisbankinggroup.com/ sustainability/sustainability-report-2022
Financial statements
- Consolidated income statement
- Consolidated statement of comprehensive income
- Earnings/(loss) per share
- Dividends per share
- Balance sheets
- Statements of changes in shareholders' equity
- Statements of cash flows
- Statement of accounting policies
- Financial and capital risk management
- Notes to the financial statements
- Independent auditor's report
- Alternative performance measures
Shareholder information
- Glossary
- Information for shareholders
Vanquis Banking Group plc Annual Report and Financial Statements 2022 | 1 |
Vanquis Banking Group at a glance
Our market-leading
products
Vanquis Banking Group meets the needs of its customers through three products: credit cards, vehicle finance and unsecured personal loans. The credit card business offers credit cards over a wide range of price points, and retail deposits. The vehicle finance business offers secured finance on a range of vehicle types, including cars, motorbikes and light commercial vehicles. The personal loans business offers unsecured loans of between £1k and £5k over one to four years. In January 2023, we announced that we have recently launched a pilot phase for second charge mortgages.
Our Mission is to become the first-choice bank for the UK population
who are excluded from accessing financial services from traditional lenders
Credit cards
1.54m | £150- | 24.7%- |
£4,000 | 39.9% | |
Customers* | Credit | Representative |
card limits | APR |
Read more on pages 26 to 28
Vehicle finance
100,000 | £4,000- |
£25,000 | |
Customers* | Loan range |
3-5 | 15.9%- |
years | 49.9% |
Loan terms | Representative APR |
Read more on pages 30 to 31
Personal loans
34,400 | £1,000- |
£5,000 | |
Customers* | Loan range |
1-4 | 18.0%- |
years | 39.3% |
Loan terms | Representative APR |
Read more on pages 33 to 34
Funded through:
Retail deposits (fixed term deposits)
Securitisation
* Customer numbers as at 2022 year end.
Product spectrum for the markets we operate in
Revolving credit
Prime/mainstream
Secured loans | Unsecured loans |
We will continue to evolve our product offering through 2023, enabling us to support more
Salary
Advance
Salary
finance
consumers on their credit journey. In particular:
Decreasing APRs
APR >20%
APR >50%
APR >100%
Buy | |||
now, | |||
Credit card, | Over- | pay | |
store card | drafts | later | |
and retail | |||
credit accounts | |||
Lines | |||
of credit |
1st and
2nd
charge
Vehicle mort- finance gages
Pawnbroking
Personal loans
and retail point-of- sale finance
Guarantor
loans
- We will continue to develop our unsecured loans product offering via Vanquis Bank to customers in the open market, including broadening the range of APRs offered and broadening our loan sizes and terms.
-
Within vehicle finance, we continue to review our product proposition, including loan sizes, terms,
APRs and asset classes. For example, today we cover cars, motorbikes and LCVs, but we aspire to broaden this to enable us to support more customers' needs.
Decline/unable to lend
2 | Vanquis Banking Group plc Annual Report and Financial Statements 2022 |
Supporting and understanding
our customers
The Group is a leading specialist banking group focused on the mid-cost and near-prime parts of the market in the UK. Our customers may not be well served by mainstream lenders for a multitude of reasons:
Strategic report
Managing on below-average incomes with limited savings, meaning unforeseen expenses
can be challenging
New to credit or new to the UK and therefore have little or no credit history
Have variable incomes | Experienced a |
(e.g. self-employed, on a | significant life event |
zero-hours contract, have | (e.g. job loss, ill |
multiple part-time jobs) | health, divorce) |
Looking to build or | Value a more tailored |
rebuild their credit rating | product and service |
A wider range of suitable and sustainable credit products is required than is typically provided by mainstream lenders.
In addition, our customers sit across a broad range of risk profiles. It is therefore important that a range of price points can be offered, increasing financial inclusion. Finally, our customers' needs and circumstances are often more fluid than those of consumers served by mainstream providers, requiring us to provide a more flexible approach.
Our customers' typical characteristics
Income | Credit cards | Vehicle finance | Personal loans | |||
Full or part-time salaried (66%) | Full-time salaried (77%) | Full or part-time salaried (77%) | ||||
source | or self-employed (16%) | or self-employed (15%) | or self-employed (6%) | |||
Income | ||||||
Earning around the national average (£30k) with core spread between £20k and £50k | ||||||
level | ||||||
Housing | 20% hold a mortgage1 | 10% hold a mortgage1 | 16% hold a mortgage1 | |||
Typical | 46-65 years old | 36-55 years old | 26-45 years old | |||
age | ||||||
Credit | Mid-cost/near prime | Mid-cost/near prime | Mid-cost/near prime | |||
score | Typical customer credit scores sit between 500 and 6002 | |||||
Savings | Circa half have material savings | Limited savings | Circa half have material savings | |||
(enough to cover emergencies or | (enough to cover emergencies or | |||||
anything unexpected) | anything unexpected) |
Source: BoxClever survey of 3,510 non-prime consumers and 2,929 Vanquis Banking Group customers, December 2019.
- The mortgage holders' data was sourced from internal customer data.
- Customer credit scores based on TransUnion Gauge 2 score.
Read our market overview on pages 18 to 19
Vanquis Banking Group plc Annual Report and Financial Statements 2022 | 3 |
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Vanquis Banking Group plc published this content on 12 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2023 09:19:07 UTC.