Competition Commission

Provident Financial PLC
27 April 2006

Statement on Competition Commission Provisional Findings

Provident Financial notes the publication of the Competition Commission's
Provisional Findings and Possible Remedies for its home credit inquiry. This is
the latest stage in the Competition Commission (CC) process.   No decisions have
been taken and the inquiry is now expected to be concluded later than scheduled
- in the autumn of 2006.

As the CC itself acknowledges, there are a number of areas where it has yet to
conclude its thinking including the 'difficult and contentious' area of the
approach to the measurement of profitability.  We strongly disagree with the
CC's methodology and conclusions regarding profitability, which forms the
cornerstone of its Provisional Findings.  We believe that the CC's approach on
profitability is flawed and we have produced expert evidence from Sir Bryan
Carsberg and Professor Colin Mayer to support this view.  Customers are not
being over-charged for their home credit loans nor is the home credit sector
making excessive profits.  We will continue to engage with the CC on this topic.

Provident Financial is pleased that the CC's own research confirmed high levels
of satisfaction among customers who find home credit products well-suited to
their needs. The CC has recognised evidence of innovation within the industry,
that the relationship between customers and agents is appropriate and that
customers value the service they receive. We are also pleased to note that the
CC recognises that 'the APR is an imperfect basis for comparison in this market'
and that 'the home credit product in its current form fulfils an important role
for a significant number of customers'.

We will work constructively with the CC on the potential remedies they have
identified: increased data sharing; better price information; provision of
regular statements; the provision of comparable products; relaxation of the
rules on canvassing new customers and increasing the amount of the early
settlement rebate.  We will aim to ensure that any remedies are in the best
interests of our customers.

We share the CC's reluctance to pursue price caps. We do not believe they work
in the interests of consumers. Rather, they can harm those that they are
supposed to protect, as most recently highlighted by the Review by the
Department of Trade and Industry in 2004.  Indeed the National Consumer Council,
sponsor of the original super-complaint which led to the CC inquiry, agrees with
us on this point.

Further discussions and a thorough consultation with the CC with regard to
potential remedies will now begin.



Enquiries: Kevin Byram, Brunswick, 020 7404 5959

27th April 2006






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