Pre-close briefing statement

Provident Financial PLC
14 December 2004

December 2004 pre-close trading update



Provident Financial is a leading international provider of consumer credit, car
finance and motor insurance with 3.6 million customers in the UK, Republic of
Ireland, Poland, Czech Republic, Hungary, Slovakia and Mexico.



The group, overall, has traded in line with market expectations for the 11
months to November 2004.



The international division is performing very well.  Credit issued and
collections for the 11 months to November 2004 were, in local currency terms,
both 25% up on the corresponding period of last year.  Credit quality is stable
and profits are, as expected, increasing rapidly.  Customer numbers were up by
26% to 1.48 million at the end of November and in the early weeks of December
have reached 1.5 million, exceeding for the first time the number of customers
in our UK home credit business.  Amongst the established markets Poland
continues to show the fastest growth with credit issued up, in local currency
terms, by 12% and customer numbers up by 16% to 884,000. Poland now looks set,
in the medium term, to exceed the 1 million customer target we set in 1999.  The
Czech Republic, whilst growing more slowly, remains on course to achieve its
medium term target of 250,000 customers, with credit issued, in local currency
terms up by 6% and customer numbers up by 3% to 220,000. Hungary continues to
grow rapidly, with customer numbers up by 83% to 223,000, and is expected to
earn its first full year profit in 2004, a full year ahead of plan. Slovakia,
the smallest of our international markets is also growing rapidly with customer
numbers up by 64% to 92,000 and is on track to report its maiden profit in 2005.
The pilot operation in Mexico is progressing well. We are currently evaluating
performance and will make our decision on how to proceed in the spring of next
year.



UK home credit is performing slightly better than we had previously expected, as
profit improvement measures have taken effect.  Customer numbers and credit
issued have reduced, by 5.1% and 3.4% respectively, for the first 11 months of
this year as compared to the same period of the previous year.  As we indicated
at the half-year, approximately half of these reductions are due to increasingly
competitive market conditions and the other half comes from our more targeted
approach to customer recruitment.  This approach, which has allowed us to
curtail the issue of credit to certain unprofitable customer segments, is
yielding greater benefits than we had previously forecast.  Credit quality is
satisfactory with the bad debt charge reducing in line with credit issued.
Whilst we continue to expect profits from the business to reduce this year, the
reduction in profit is likely to be small and less significant than we had
previously expected.



The pilot of credit card products at Vanquis Bank has performed well and
provided clear evidence of a profitable market opportunity for a differentiated
credit card offer. We now intend to bring the business to operational scale
during 2005 and to actively market credit card products to new and existing
customers both by direct mail and through our agent network. We will leverage
the reach, knowledge and capabilities of our UK home credit business in selling,
underwriting and collecting credit card products and we believe that this
combination of new and existing skills will allow us to establish and grow a
distinctive and profitable credit card business. We expect start up losses of
about £14 million in 2005 with substantially reduced losses in 2006 and profits
thereafter.



Yes Car Credit, which recorded pre-tax profits of £11.3 million in 2003, has had
a tougher year in 2004.  It is operating in a used car finance market that has
seen falling volumes and increasing competition.  Since the half-year, Yes Car's
sales volumes have fallen by 16%, compared with a 9% fall in the market as a
whole.  This performance was well below our expectations and only achieved with
increased advertising costs and an increased branch network of 29 branches
(November 2003 - 26 branches).  The combination of reduced year on year sales
volumes, together with increased advertising and branch costs has resulted in
the business trading at or around break even since the half-year.  Bad debt as a
percent of average net receivables is steady at 15.3% (December 2003 - 15.6%).
Changes are underway to improve business performance including a further
strengthening of the management team, improvements to the effectiveness of
advertising expenditure and a postponement of the branch expansion programme.
Whilst we are working hard to improve the business we expect this will take time
to have an effect and so the profits for 2004 and 2005 are likely to be below
market expectations.



We continue to take an active approach to regulatory matters.  We expect a
decision in the near future from the Office of Fair Trading as to whether or not
the home collected credit sector in the UK will be referred to the Competition
Commission. In Poland, a minority party proposal for an interest rate ceiling
continues to be considered by a parliamentary committee. The Polish government
and the central bank oppose the rate ceiling proposal and alongside other
financial institutions, we continue to make it clear that such a measure is not
in the interests of consumers.



The insurance division is trading well.  The favourable trend in claims costs
that we reported at the half-year has continued and policyholder numbers are
beginning to stabilise.  The division's profits for 2004 and 2005 are likely to
be ahead of market expectations.



Chief Executive Robin Ashton said  'We believe that the group remains well
placed to respond to the competitive and mature home credit market in the UK
with our strategy of continuing to grow our highly successful international
business and broadening our range of credit products to deliver new sources of
growth and shareholder value.'



Further information on Vanquis Bank is available at www.providentfinancial.com.



Enquiries:



Media
David Stevenson         020 7404 5959

Investor Relations
Helen Waggott            01274 731111





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