Vanquis Banking Group (VANQ) H1 2025 earnings summary

Executive summary

• Returned to profitability in H1 2025 with profit after tax of £5.6m and three consecutive quarters of balanced growth, supported by cost control, technology transformation, and all product lines profitable.

• Customer proposition enhanced with new products, improved risk management, and technology upgrades, including Gateway transformation and mobile app launch.

• Complaint costs fell 36% year-over-year due to regulatory changes, with credit quality robust and responsible lending maintained.

• Vehicle Finance returned to profit after a prior year loss, and the Personal Loans portfolio sale was completed.

• Cost control and modernization efforts are delivering, with over half of the £15m cost savings target for 2025 already achieved.

Financial highlights

• Gross customer interest-earning balances reached £2.46bn, up 7%, with upgraded year-end guidance to >£2.6bn.

• Net interest margin (NIM) at 17.4%, expected to remain above 17% for the full year.

• Cost-to-income ratio improved to 62.5% (down 37% YoY), with guidance to reach high 50s by year-end.

• Profit before tax from continuing operations was £6.2m; profit after tax £5.6m.

• Return on tangible equity at 3.1%, in line with low single-digit guidance.

Outlook and guidance

• Confident in achieving all 2025 guidance, with upgraded balance growth expectations and NIM above 17%.

• Cost-to-income ratio expected in the high 50s for FY25, trending to low 50s in FY26 and 49% or lower in FY27.

• ROTE guidance remains low single digits for FY25, low double digits for FY26, and mid-teens for FY27.

• Impairment expected to rise in H2 due to new originations, but full-year cost of risk to remain within guided ranges.

• Capital ratio expected to reduce toward >17.5% by year-end as growth continues.