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S & U mulls entering savings market

Last updated: 17:36 13 Feb 2015 AEDT, First published: 18:36 13 Feb 2015 AEDT

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Niche lender S & U (LON:SUS) is mulling whether to enter the savings market as an additional means of funding its expansion plans.

In a trading update that revealed impressive growth metrics, especially in its car loan business, the company said it is considering whether to apply to the Prudential Regulation Authority (PRA) for the right to take deposits.

The company continues to generate cash at a ferocious rate, and gearing has fallen slightly as a result to 67%, but with demand for its motor finance and home credit services growing strongly, the group sees plenty of opportunities for expansion, and considers it prudent to diversify its sources of funding.

In the year just gone, Advantage Finance, its car loan subsidiary, traded at record levels, despite new entrants trying to muscle into the market.

S & U said Advantage’s advances are up 48% on last year; active customer numbers are up by a third and credit quality remains at its best ever level.

The current year has begun well, underpinning the group’s confidence in proposing a second interim dividend of 19p, meaning the full-year pay-out rises to 36p from 30p in 2013.

"As real incomes at last begin to match improving consumer confidence, we see significant opportunities for sensible and responsible growth both in our motor finance and home credit divisions,” said Anthony Coombs, chairman of S & U.

“On the assumption that the British political environment remains stable, and that regulation is therefore consistent and proportionate, we see every reason to believe that our commitment to treating our customers fairly across the group and to giving them the best standards of service, will continue to reap appropriate rewards," he added.

New car wobble should help Advantage car loan business, says S&U’s Coombs

Anthony Coombs, chairman of S&U PLC (LON:SUS) told Proactive he expects the used car market to remain strong and underpin another good year for the finance firm. Unlike new cars, the used car finance market grew by 6% in 2017 helping S&U lift profits by 20%. ''Our customers...

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