Vanquis Banking Group (LON:VANQ) Posts Earnings Results

Key Points

• First-half profit before tax rose 44% year over year to £8.9 million, with gross customer interest-earning balances increasing 24% to more than £3 billion and all three lending businesses remaining profitable.
• Cautious customer spending reduced Credit Card utilization, while an additional £8.5 million IFRS 9 provision related to higher expected U.K. unemployment cut profitability by about £15 million versus expectations.
• Vanquis lowered near-term guidance to single-digit statutory ROTE for 2026, but maintained longer-term targets for low-double-digit ROTE in 2027 and mid-teens ROTE in 2028; it also plans to restore a modest dividend with its 2026 full-year results, subject to economic conditions.

Vanquis Banking Group (LON:VANQ - Get Free Report) announced its earnings results on Thursday. The company reported GBX 1.80 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Vanquis Banking Group had a net margin of 1.87% and a return on equity of 1.89%.

Here are the key takeaways from Vanquis Banking Group's conference call:

• First-half profit before tax rose 44% year over year to £8.9 million, exceeding Vanquis’s full-year 2025 result. Gross customer interest-earning balances increased 24% to more than £3 billion, while all three lending businesses remained profitable.
• More cautious customer spending reduced existing Credit Card utilization, leaving first-half Credit Card income about £7 million below expectations. Vanquis also booked an additional £8.5 million IFRS 9 provision tied to a higher forecast U.K. unemployment peak, reducing first-half profitability by approximately £15 million versus expectations.
• Management lowered near-term guidance, now expecting 2026 statutory ROTE in the single digits, net interest margin of approximately 14.5%, and a cost-to-income ratio in the low 50s. The company still targets low-double-digit ROTE in 2027 and mid-teens ROTE in 2028, assuming current customer spending behavior persists.
• Second Charge Mortgages balances grew 34% to £800 million and are expected to continue increasing by roughly £30 million per month, while Vehicle Finance growth is expected to accelerate from 2027 after its new technology platform is completed. Transformation savings guidance was also raised to £30 million–£35 million through 2028.
• Vanquis reported strong liquidity and capital capacity, including £93 million of surplus CET1 capital and a planned reduction in its target CET1 ratio to above 12% from 2027. The board intends to reestablish a modest dividend with the full-year 2026 results, subject to no significant deterioration in the U.K. economy.

Vanquis Banking Group Price Performance

Shares of LON VANQ traded down GBX 27.80 during mid-day trading on Thursday, reaching GBX 87.40. The company's stock had a trading volume of 12,719,925 shares, compared to its average volume of 919,853. Vanquis Banking Group has a 52 week low of GBX 82 and a 52 week high of GBX 132. The stock has a fifty day moving average of GBX 113.80 and a two-hundred day moving average of GBX 115.13. The firm has a market capitalization of £218.79 million, a PE ratio of 28.19 and a beta of 1.23.

Wall Street Analysts Forecast Growth

VANQ has been the subject of a number of recent research reports. Shore Capital Group reissued a "buy" rating on shares of Vanquis Banking Group in a research report on Wednesday, May 6th. Berenberg Bank decreased their target price on Vanquis Banking Group from GBX 165 to GBX 145 and set a "buy" rating on the stock in a report on Thursday. Three research analysts have rated the stock with a Buy rating, According to data from MarketBeat.com, the stock has an average rating of "Buy" and a consensus target price of GBX 142.50.

Insider Buying and Selling

In other Vanquis Banking Group news, insider Dave Watts purchased 45,000 shares of the company's stock in a transaction on Thursday, July 30th. The stock was acquired at an average cost of GBX 85 per share, for a total transaction of £38,250. Over the last 90 days, insiders purchased 45,394 shares of company stock valued at $3,870,041. 3.68% of the stock is currently owned by insiders.

About Vanquis Banking Group

We're Vanquis Banking Group plc, an FTSE All Share company and a leading specialist bank, established in 1880. We lend responsibly, providing tailored products and services to 1.75 million UK customers through Vanquis, Moneybarn, and Snoop. https://www.vanquisbankinggroup.com/shareholder-hub/investment-case/

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