Interim Management Statement

Provident Financial PLC
08 May 2008





Provident Financial plc

Interim Management Statement

8 May 2008


Provident Financial plc, the leading UK non-standard lender, made the following
Interim Management Statement at its Annual General Meeting held at noon (BST)
today.

Commenting on the company's performance for the year to date, its Chairman John
van Kuffeler said,

'We are delighted with the strong start to 2008.  Market conditions remain
favourable for Provident Financial and the company's funding position is strong.
At the same time, management is exercising a sensible degree of caution in
order to deliver further high-quality growth in 2008 against the backdrop of an
uncertain macroeconomic outlook.'


Market conditions

Conditions in the UK non-standard lending market continue to be favourable for
Provident Financial. Mainstream and near-prime lenders have continued to
tighten their credit granting criteria, thereby restricting the supply of credit
to non-standard consumers.  These conditions, together with the effectiveness of
the group's marketing strategies, are resulting in an increased flow of
applications for the credit products offered by Provident Financial.

The weekly call on customers allows the impact of changes in the economic
environment to be identified rapidly and lending decisions adjusted immediately.
Lending decisions continue to reflect the pressure on changes in customers'
disposable incomes from rising food, fuel and utility bills which have been
present for two years as well as the outlook for unemployment and, as a result,
the group's customer base shows no deterioration in credit quality.


Business performance

Our core Consumer Credit Division has made a strong start to 2008, with customer
numbers increasing by 6.3% over the twelve months to the end of March.  The
first quarter of the year is the most important period for collections, so it is
pleasing to see that impairment levels have remained stable since the year-end.

The roll-out of the new core accounting and processing system, known as Focus,
is progressing to plan and is currently implemented across over 40% of the
branch network.  Focus will provide the platform for a series of business
improvement initiatives, including the new commission scheme for agents which,
after successful field trials, has recently been approved for national roll-out.
The new commission scheme is expected to provide further improvements to both
collections and agent retention levels and has been received positively by both
agents and field management.

The market test of Real Personal Finance continues to perform well, with around
two-thirds of customers having had a previous relationship with the home credit
business.  Early business metrics, including credit quality, are encouraging.
As planned, Real Personal Finance will be expanded to around 50 locations in the
next month, with a decision on the pace and scale of a national roll-out to be
taken during the third quarter of the year.

Vanquis Bank is experiencing an increasingly strong flow of applications from
both the internet and direct mail channels.  Customer numbers stood at 345,000
at the end of March, up from 316,000 since the year end and showing year-on-year
growth of 30%.  Nonetheless, Vanquis Bank is adopting a cautious approach to
accepting new business.  Underwriting has been tightened on three occasions in
the last nine months and over 70% of card applications are being declined.
Impairment levels are very stable and are consistent with the medium term
targets for the business.

Successful partnerships are being developed with several mainstream card
issuers, whose declined internet applications are offered a link to Vanquis
Bank's own website.  There are also active discussions taking place with a
number of other major card issuers to explore similar arrangements.  Initial
results suggest that these relationships will become an important source of
profitable new business.

Vanquis Bank has recently secured new premises for its call centre in Chatham,
which will provide the capability to serve up to 750,000 accounts when fully
staffed.  At the same time, it is taking the opportunity to upgrade its IT
capability to accommodate future growth. These infrastructure changes will be
completed by late summer.


Funding & capital

The group remains strongly funded with around £80m of excess capital and over
£400m of undrawn facilities and is therefore able to execute in full its
internal plans, as well as being able to capitalise on current favourable market
conditions.


Outlook

The strong start to the year and continuing favourable market conditions,
coupled with the company's strong funding position and management's close
attention to the quality of new business being written, should secure the
delivery of high-quality profits growth in 2008.


The company will announce its 2008 interim results on 30 July 2008.




Enquiries:

Media
David Stevenson, Provident Financial               01274 731111
Nigel Prideaux, Brunswick                          020 7404 5959

Investor Relations
Stuart Caldwell, Provident Financial               01274 731111




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