Insider: ex-HSBC man backs recovery at this lender

A former HSBC executive has staked £38,500 on the rebound of Vanquis Banking Group (LSE:VANQ) after shares in the lender he now helps to run slumped due to downgraded guidance.

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Dave Watts, who spent 30 years with HSBC and was part of the team that established its UK ring fence bank, dealt Vanquis shares on Thursday at a 16-month low price of 85.4p.

The move by the FTSE All-Share company's finance chief followed a slide from 115p after the specialist bank said it was earning less on each pound it lent.

The reduction in its outlook for net interest margin was partly due to the impact of the uncertain economic backdrop on spending and utilisation by existing credit card holders.

This will mean that a greater proportion of its growth is from new customers who tend to generate less income in their early years with the bank. It also highlighted lower yields on second charge mortgages, given competitive pressures and higher funding costs.

The bank provides underserved parts of the UK population with credit cards, secured home loans and savings products, while it also owns the Moneybarn vehicle finance brand.

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It said in last week's interim results that its balances were still growing strongly but that the yield pressure will moderate its returns in 2026 and 2027. However, it added it was well placed for stronger profitability beyond this near-term impact.

Vanquis backed up its confidence by pledging to re-establish a modest dividend with annual results, as long as there is no significant deterioration in the UK economy.

Chief executive Ian McLaughlin hailed “further significant progress” in the first half of the year, having lifted pre-tax profit by 44% to more than the whole of 2025 at £8.9 million.

This was despite absorbing a £8.5 million increase in its impairment provision, which is based on a projection that the peak UK unemployment rate will increase to 5.7%.

McLaughlin said the company's transformation reached another milestone with the migration of all credit card customers to a new mobile app, which will provide a stronger platform for engagement, operational efficiency and future scalability.

Vanquis now expects to deliver approximately £30-35 million of transformation cost savings, ahead of its previous guidance of £23-28 million.

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However, the downgraded guidance means Vanquis now sees the delivery of a mid-teens return on tangible equity in 2028, having previously pushed the target back from 2026 to 2027.

House broker Panmure Liberum said this was a genuine setback. However, it added: “The question it poses is whether the recovery story has been broken or merely delayed. On the evidence here, we think the latter.

“Growth is intact, the pressure is on yield rather than volumes, and much of the hit to returns reflects a cautious stance on provisioning rather than a book going wrong. The pieces of the thesis are still in place, they will simply take longer to come through.”

The bank retained its target price of 160p and Buy recommendation following the results, whereas Berenberg cut by 20p to 145p and Shore Capital said the delay and heightened execution risk meant it was likely to reduce its valuation estimate from 150p to the 120p-130p range. Shares were 79.2p on Friday.

Topping up at Rolls

A Rolls-Royce Holdings (LSE:RR.) non-executive director who has built a £1.3 million stake after six years as a board member has bought more shares in the wake of last week's beat-and-raise results.

Angela Strank, who previously worked at BP alongside current Rolls chief executive Tufan Erginbilgic, made her latest investment worth £24,000 at Thursday's price of 1,448.6p.

That compared with the 126p she paid in 2023 as part of a run of dealings during the transformation of the engines maker into a top five FTSE 100 company.

She also receives income on her investments after Rolls reinstated dividend payments in June 2025, leading to last week's 33% increase in the 18 September distribution to 6p a share.

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The results further de-risked medium-term targets as Erginbilgic upgraded operating profit guidance for 2026 to between £4.7 billion and £4.9 billion and free cash flow to near £4 billion.

This followed an improvement in operating margin to 22.5% from 19.1% the previous year and 9.7% in the early stages of the turnaround story in 2023. The shares settled at 1,457.8p on Friday afternoon, which is below their peak of 1,504p in early July.

Among other FTSE 100 boardroom dealings, a non-executive director of Weir Group (LSE:WEIR) has spent £24,500 on shares during a strong results-day session for the mining processing equipment firm.

Penny Freer, who joined the board in October 2023, made her purchase at 2,729.3p after Weir reported a strong second quarter performance.

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The shares later drifted to Friday's 2,658p, having slumped from 3,536p prior to the start of the Middle East war in late February to 2,274p in mid-June.

Jon Stanton, who is standing down as chief executive after ten years in the role, said Weir started the second half with a large order book, a strong demand backdrop and good pipeline visibility.

He added: “The long-term value creation opportunity for Weir remains compelling.”