S&U PLC (LSE:SUS) chairman Anthony Coombs discussed the specialist lender's trading update and current market conditions with Proactive's Stephen Gunnion.
Coombs outlined the challenges posed by the regulatory environment, specifically the Financial Conduct Authority's (FCA) scrutiny of the motor finance industry.
"We're working with them on a very constructive basis to look at things like consumer duty and how that impacts upon our relations with our customers and in particular on issues like forbearance and affordability," he stated.
Coombs said motor finance arm, Advantage, is in a consolidation phase for 2024 due to these regulatory constraints. He emphasised the importance of aligning advances with affordability criteria to maintain financial stability.
On a positive note, Coombs highlighted the strong performance of Aspen, S&U's property finance business. Aspen's advances more than doubled to £44.4 million in the first quarter, he noted, underscoring the robust growth and prudent lending practices of the division.
Coombs also shared his outlook on the residential property sector, anticipating improvements in market activity and prices due to underlying property scarcity and potential interest rate cuts by the Bank of England.
