LONDON: Provident Financial, the UK’s largest subprime lender, cut 170 jobs at its consumer-credit business as rising fuel, food and utility bills eroded demand for borrowing.

The cuts, equivalent to about 10 per cent of the division’s workforce, came as first-half profit at the unit fell 27 per cent to £36.1 million (US$55.4 million), the Bradford-based company said. A 70 per cent increase in profit at its Vanquis Bank unit helped to boost Provident Financial’s net income to £55.3 million from £54 million in the year-earlier period.

“It’s a tale of two different businesses,” said chief executive officer Peter Crook.

Provident Financial’s consumer-credit division has been hit by a weak UK economy, low customer confidence and pressure on household incomes. Demand for credit from higher-quality customers, who typically borrow more for longer, remains weak, the company said.

“The group overall has performed in line with its internal plan in the first half of 2013 and expects to do so for the year as a whole,” the company said.

The stock has advanced 17 per cent this year, for a market value of about £2.2 billion. The company will pay a first-half dividend of 31 pence a share, up from 28.8 pence.

(Bloomberg)