The Leeds-based firm said it has made good progress in credit issued with year on year contraction slowing to 18 per cent in the first quarter 2021 compared with a 31 per cent contraction in the fourth quarter of 2020.

Gerard Ryan, IPF’s chief executive, said: “Our group delivered a robust trading performance in the first quarter of the year with improved credit issued trends and a strong collections performance.

“We are selectively relaxing our credit settings and rebuilding our receivables portfolio, whilst maintaining credit quality and cost efficiency, to return strongly to full year profitability.

“With the full extent of Covid yet to be determined, we know now more than ever that our business plays an essential role in society, providing finance responsibly to underbanked and underserved consumers and, in turn, delivering long-term growth and value to all our stakeholders.”

The firm said a lower full year impairment charge is likely to result in a stronger rebound in profitability than previously expected.

Whilst credit issued was in line with expectations in the first quarter, IPF said it remains cautious because of the dynamic Covid-19 environment and resulting frequent changes in lockdown restrictions which have an impact.