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(Sharecast News) - Distribution Finance Capital said on Friday that full-year profit was expected to be materially ahead of market expectations, after stronger-than-expected lending growth and low impairments in the first half.
The AIM-traded specialist bank said new loan origination was expected to reach about 1bn for the six months ended 30 June, up 21% on the prior year, while its aggregate loan book was set to close the period above 915m, more than 25% higher year-on-year.
Its asset finance product also continued to gain traction, particularly in static caravans and holiday parks, with the loan book expected to reach almost 40m from 15m at the end of December.
DF Capital said portfolio quality remained "exceptionally strong", with cost of credit risk well within its target of less than 1%.
The group now expects first-half profit before tax of at least 13m, representing an annualised return on required equity of more than 17%, and said the shift towards longer-tenor lending was generating additional near-term benefits.
Chief executive Carl D'Ammassa said the group's multi-product strategy was "now bearing fruit", leaving it well placed to deliver on its FY28 and FY30 targets.
At 1230 BST, shares in Distribution Finance Capital Holdings were up 11.6% at 66.4p.
Reporting by Josh White for Sharecast.com.
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