Sub-prime lender Cattles cuts 1,000 jobs
by Gill Montia
Story link: Sub-prime lender Cattles cuts 1,000 jobs
Cattles, the Yorkshire-based sub-prime lender, is cutting 1,000 jobs, or 20% of its workforce.
The company expects volumes at its principal lending business, Welcome Finance, to decline by up to 75% in 2009.
The division has around 500,000 non-standard customers and provides direct repayment loans from 183 branches across the UK.
The lender also operates Shopacheck, which offers short-term loans with repayments collected weekly by agents.
Cattles is currently in talks to refinance debts of around £500 million and needs to make cost savings of about £40 million.
The company says 2008 profits should meet market expectations but deteriorating trading conditions will have a negative impact on profitability in 2009.
Its chief executive, David Postings, is optimistic that by reducing costs and conserving liquidity now, the business should weather the current economic conditions.
The lender also has plans to expand into a deposit-taking bank and is currently in discussion with the Financial Services Authority regarding its application for a retail licence.
The process has taken longer than expected, despite Cattles having raised £200 million in a rights issue in April of last year, to ensure that it has sufficient capital adequacy to qualify for the licence.
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