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PCF Group says it is in a strong financial position to weather coronavirus disruption

Published: 05:03 27 Apr 2020 EDT

PCF Group Plc -
The loan book had grown by 45% to over £400m as at 31 March 2020

PCF Group Plc (LON:PCF), the specialist business bank, said it entered the current coronavirus crisis in a strong financial position with a capital ratio of 17% at end-March and headroom on its Tier 2 capital facility.

In a trading update, the group said that, up until February, business was strong, but the impact of the coronavirus lockdown has since seen new loans issued fall 26% below target in March and by 65% in April.

Broadcast, entertainment and the transport sectors have seen the sharpest decline with around a quarter of the loanees now seeking some forbearance, it added.

PCF said, however, that its business continuity plans have proved resilient and it is still supporting SMEs, while it has £75mln of unearned future income on its balance sheet to come through.

The company noted that its loan book has grown by 45% to over £400mln as at March 31, 2020, up from £276mln at the same stage in 2019,  supported by retail deposits of £340mln (2019: £204mln). 

Tim Franklin, PCF's chairman, said in the statement: "The short-term trading and economic environment is very uncertain. While there will be challenges ahead, we have an experienced management team, strong capital base and high levels of liquidity which position us well.

“As a prudent business, we continually assess the risks and sensitivities of adverse economic corrections as part of business risk planning. This was partly behind our decision to become a bank and focus on prime lending markets following the challenges posed at the time of the last financial crisis.

“This decision has provided us with improved resilience and strong growth which will stand us in good stead throughout this current period and beyond.”

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