Moneyway increased its lending revenue in the first half of the year, parent company Secure Trust Bank revealed in its half year results.
Revenue for the period was £22.4m, up from £18.8m for the same period in 2016. Lending balance also increased – up from £205.6m in H1 2016 to £258.4m in H1 2017.
Total impairment for the six months to the end of June reached £9.2m, higher than the £6.1m recorded for the same period in 2016.
This came despite the fact that Moneyway has stopped lending to the subprime sector this year.
Instead it is now focussing slightly higher up the credit curve, in the non-prime sector, which it said was higher volume and lower risk, but lower margin.
According to Moneyway, the proportion of new lending written in this category during the period was over 37% higher than the same period last year.
It explained the higher impairment was a reflection of the performance of the subprime lending which has since been discontinued.
This move was in line with Secure Trust Bank’s overall direction. In January, it stopped offering subprime unsecured loans, while it has also been growing its lower risk real estate finance lending book.
Looking forward, Moneyway said it would look to optimise its performance in the non-prime sector of the market through existing introducer channels. The shift in business mix toward lower risk motor finance lending during the period is expected to continue and result in improvements in the overall motor portfolio quality as it works through to the back book.
Paul Lynam, chief executive of Secure Trust Bank, said: “The first half of 2017 has seen a continuation of the strategic repositioning of the business commenced in 2016. Over this time we have considerably reduced our activities in higher risk consumer lending and did so before the recent warnings from the Bank of England and regulatory bodies. We have reallocated capital to lower risk lending segments and are pleased with the strong growth achieved here. We remain strongly capitalised and well positioned to grow the Bank’s lending portfolio in line with our ambition and risk appetite and have a clear growth strategy.”