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Provident Financial, a UK lender to low income households, has reported a rise of almost 20 per cent in first-half profits, while stressing that it is "totally unaffected" by the current crisis in the credit markets.

In a statement today the company revealed that pre-tax profits from its continuing UK operations rose by 19.4 per cent to £38.2 million in the six months to June 30th.

Overall first-half profits before tax and exceptional items also climbed from £47 million, for the same period in 2006, to £56.3 million. The latter figure included the performance of the group's former international unit, International Personal Finance, which split off from Provident Financial in July.

The company said that its credit card unit, Vanquis Bank, was also on a "sounder commercial footing" following management actions taken at the end of last year.

Provident Financial confirmed that the unit is expected to break-even over 2007 as a whole, compared to a loss of £18.3 million recorded in 2006.

The doorstep lender, whose agents administer short-term loans and call on borrowers each week to collect repayments, did however warn that economic conditions for households on average or below average incomes in the UK remained "challenging".

But the company said the nature of its operations meant that it was "uniquely placed" to react to changing circumstances and to make adjustments to its arrears management, amid continuing pressure on consumers from rising food and fuel prices, as well as utility bills.

However it added that apparent evidence that some mainstream lenders are tightening lending criteria presented an "increasing market opportunity" for the group.

Meanwhile, Provident Financial stressed that its business had not been impacted by ongoing turbulence on the world's financial markets, resulting from rising default levels in the sub-prime mortgage market.

Provident Financial chairman John van Kuffeler said: "Provident Financial is totally unaffected by the crisis in the credit markets and we are confident that our continuing UK operations will deliver good profits growth for 2007 as a whole."