CREDIT lender Provident Financial announced a 20 per cent fall in half-year pre-tax profits yesterday following heavy investment in various parts of the company.

The Bradford-based company is hoping to overcome the downturn in the UK home credit market by boosting customer numbers and tightening credit controls to ensure its customers can pay their debts.

The UK credit market has become increasingly competitive, but unlike the high street banks, Provident's customers have not really been affected by recent increases in interest rates.

Pre-tax profits for the six months to June 30 fell 20 per cent to £66m. Revenue growth in the core UK and international home credit businesses rose five per cent to £568.7m.

Investment in start-up businesses and new products doubled to £19.1m over the period, including £10.7m on the new Vanquis Bank credit card and £5.8m on international start-ups.

Provident's international business saw lower loan volumes following the introduction of tighter credit criteria and new legislation to cap interest rates in Poland. The group had to change its product structure in Poland and retrain its staff.

A pilot project on the Mexican market is well under way and the group is now looking at new markets including India, Russia, and to a lesser extent, Brazil and Ukraine.

Provident said its Vanquis Bank credit card unit, launched in 2004, had felt the effect of tighter lending, but customer numbers now stood at 212,000.

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