Vanquis Banking Group (PRVA) AI Stock Analysis

Company Guidance

Management updated guidance assuming the more cautious Q2 spending persists: gross customer interest‑earning balances are now guided to exceed £3.3bn by end‑2026 and £3.7bn by end‑2027; net interest margin is expected to be ~14.5% in 2026 and >13% in 2027 with risk‑adjusted margin >8.5% in 2026 and ~8% in 2027; cost‑to‑income is guided to the low‑50s in 2026 and the mid‑to‑high‑40s in 2027; statutory ROTE is expected to be in single digits in 2026 (down from a prior expectation of low double digits), rising to low double digits in 2027 and mid‑teens in 2028 (the £8.5m IFRS 9 macro provision accounts for ~2.4ppt of the ROTE change). The revision follows H1 results (PBT £8.9m, +44% y/y; gross interest‑earning balances >£3.0bn, +24% y/y; H1 NIM ~15%; H1 cost‑to‑income 53.1% with operating costs −8% y/y), and reflects product metrics and mix shifts: credit card balances £1.55bn (asset yield 25.5%; new customer balances +£127m; existing customer balances −£98m), second‑charge mortgages £800m (H1 +34%; ~£30m/month; yield ~6.8%), vehicle finance £707m, group cost of risk ~7% and credit card gross charge‑off rate 13.7%; capital and liquidity guidance includes transformation savings of £30–35m to 2028, CET1 15.6% at H1 with ~£93m surplus to the disclosed minimum and a new CET1 target >12% from 2027, HQLA >£1.2bn and an LCR of 221%.