Bosses at Provident Financial have said the business is well-placed to deal with changing market conditions as it prepares to demerge with its international business.

The Bradford-based lender will split into two separate companies in the coming weeks, with its international businesses in Mexico, Poland and Hungary to trade under the name, International Personal Finance. The FTSE250 company also expects to sell off its motor insurance business in the next few weeks in a radical restructuring of the company.

The announcements came as Provident Financial, headquartered on Sunbridge Road, reported a 5.5 per cent growth in pre-tax profit to £191.3 million for the year ended December 31.

The home credit and credit card provider made the profit after absorbing a £30.4 million investment bill in start-up business, designed to drive further growth. Despite coming under the scrutiny of a Competition Commission enquiry Provident managed to increase its number of home credit clients by two per cent, the first time it had expanded its client base in three years.

The newly acquired Vanquis Bank made "a substantial start-up loss," according to chairman John van Kuffeler, but is expected to break even during 2007.

And the motor-insurance branch of the business, which bosses say will be sold before the demerger, is also progressing well, reporting an increase in profits to £41 million.

After the demerger and sale of its insurance wing, Provident will continue to operate its UK home credit and non-prime credit card businesses.

Peter Crook will be chief executive of the new Provident Financial business and anticipates further growth for the company. He said: "The Competition Commission completed its report last year with a relatively benign outcome. Its findings regarding data sharing could work in our favour.

"A step up in marketing should attract more customers and changes in banks with regards to credit cards and declining more and more people credit should work to our favour with our policy of no hidden charges and transparent agenda.

"We are very pleased with the results which are ahead of many analysts' expectations."

Mr Crook added that talks were well underway with potential buyers for the insurance business and that an announcement was due to shareholders soon on the issue."

Mr van Kuffeler added: "Having laid solid foundations in Central Europe during 2006, we expect to see continued progress in the coming year. The opportunity within the international business for growth in both new and existing markets remains excellent.

"2006 has been a year of significant progress for the group. This leaves the group well placed to effect the demerger of the international business following the sale of provident Insurance which the board expects to be completed during the second quarter of 2007."