PCF lender to pull out of UK market after failed bailout

  • PCF will not start lending again
  • Could sell all or part of its loan portfolio
  • The company will explore strategic transactions

Nov 9 (Reuters) – PCF Group (PCF.L) is pulling out of the UK banking market and plans to delist its shares on AIM, after failing to raise capital or secure strategic options to strengthen its retail and business lending business, the lender says.

Shares of PCF fell around 62% to 0.4 pence in early trade after the news on Wednesday, six weeks after Castle Trust Capital withdrew plans to bid on PCF.

PCF’s decision to end its lending business underscores the challenges facing smaller banks in Britain, where the costs of regulation and doing business have risen and competition from dominant competitors including Lloyds Banking Group (LLOY.L), NatWest (NWG.L) and HSBC (HSBA.L), intensified.

“This has been a very difficult strategic decision for the board to make given the implications for the business, colleagues, customers, intermediaries and shareholders,” said PCF Bank chief executive Garry Stran. , in a press release.

PCF Bank, which was established in 1994 and offers savings and finance products to around 20,000 businesses and individuals, accelerated its review in October after a drop in half-year profit at the start of the year.

He said he would manage his loan and savings portfolio positions on the decline, without specifying how long this might take, and would seek to reduce his cost base, possibly by selling all or part of his loan portfolio. .

To cancel the AIM listing, it must consult with investors.

PCF, which has a market value of just under 4 million pounds ($4.6 million), said it would continue to explore strategic deals with interested third parties and has retained support. of Somers Limited, its largest shareholder with a 73.24% stake.

Reporting by Sinchita Mitra in Bengaluru; edited by Uttaresh.V and Sinead Cruise and Barbara Lewis

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