S&U PLC on Monday said it remains confident despite mixed trading in the past two months.

In a statement covering June 6 to July 31, the West Midlands-based lender focused on motor finance and property said trends in trading ‘unsurprisingly continue but contrast in two ways’.

First, S&U noted Aspen Bridging, its property lender, has maintained its strong and profitable growth.

But in the motor finance sector, Advantage Finance continues its period of ‘consolidation and retrenchment’, the company said.

This has resulted from a probe by the Financial Conduct Authority into whether people in the UK overpaid on their car loans.

In July, the FCA said it was giving motor finance companies more time to respond to customer complaints.

The review was launched at the start of the year following concerns that a large number of people may have been overcharged for their car loans through discretionary commission arrangements.

The selling practice, which was banned in 2021, was used by some brokers to adjust the interest rates they charged customers so that they could receive more cash in commission.

S&U said the ongoing talks with the FCA will see a contrast between a significant impact on Advantage’s profitability in the first half, and an anticipated recovery in results brought about by a plan already in place for the second half of the financial year.

Advantage should then resume its profitable path, S&U asserted.

Chair Anthony Coombs said: ‘Although current trends at our Advantage, our motor finance business are undoubtedly challenging, we thrive on challenges and work for a significant rebound in the second half. By contrast, Aspen continues to trade sensibly and at record levels. We remain confident and determined for the year ahead.’

Shares in S&U were up 0.5% to 1,895.00 pence in London on Monday morning.

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