British subprime lender Provident Financial returned to interim profit on Wednesday

Costs related to the wind-down of its doorstep lending unit fell and demand remained robust in its credit card business

Lenders, which benefited from increased borrowing as the market recovered from the pandemic, are now battling a possible spike in bad loans as the cost-of-living crisis deepens

The London-listed company, which has placed its doorstep lending unit into a managed run-off since May 2021 after a surge in complaints

Provident is also looking to focus more on lower risk customer segments amid uncertain macroeconomic conditions

The company reported a pretax profit of 37.3 million pounds ($44.96 million) for the six months ended June 30, compared to a loss of 44.2 million pounds in the year-ago period.

Provident also announced it was reinstating its dividend, with a proposed interim dividend per share of 12p.

The model has faced a surge of customer complaints driven by professional claims management companies in recent years