New UK loans group poised for London float, acquisitions

By Freya Berry and Andrew Winterbottom

LONDON (Reuters) - A new venture that aims to lend to cash-strapped consumers shunned by high street banks is seeking to raise around 100 million pounds ($152 million) in a London market debut.

Non-Standard Finance (NSF), founded by former Provident Financial chairman John van Kuffeler, has already received 48 million pounds from Woodford Investment Management, Invesco and Marathon Asset Management, it said on Thursday.

The company has been set up as a vehicle to buy as many as three businesses in the UK "non-standard" consumer finance sector, aiming for a first deal within six months.

NSF said around 12 million people in Britain do not meet the lending criteria of mainstream banks. These potential customers could be credit worthy but need a different type of credit facility provided by specialist companies.

Short-term lenders such as Wonga, QuickQuid and Lending Stream have flourished as high street banks have pulled back from riskier lending in the wake of the credit crisis.

Britain's financial watchdog has been clamping down on practices by companies who charge consumers high interest rates for such loans, dubbed "payday" lenders.

But an analyst at stockbroker Shore Capital said NSF should be able to take advantage of the crackdown by targeting the payday loans sector with regulation-ready alternatives, said Gary Greenwood.

"You can offer viable products like instalment credit loans without falling foul of the regulator. The payday loan scrutiny is actually good news for the likes of Provident and Non-Standard Finance."

Kuffeler said NSF aimed to treat customers fairly and lend responsibly to establish a "sustainably profitable group of businesses serving an important socio-demographic cluster".

Among the five other directors joining Kuffeler at NSF will be Nick Teunon, former chief financial officer of Marlin Financial Group, where Kuffeler was also chairman. They will also be joined by Robin Ashton, former chief executive of Provident which provides similar lending services .

UBS is sole bookrunner on the transaction. Peel Hunt is lead manager.

(Editing by David Holmes and Keith Weir)