Experian shares slump on slowdown

Experian sees a tailoff in credit growth

Shares in UK financial data firm Experian slumped as much as 19% after it warned that a slowdown in lending was hurting its business.

The company, which runs credit checks on consumers, said markets in the US and UK were "exceptionally difficult" because of financial market upheaval.

Many banks have made it harder to borrow money after facing problems and losses in the US mortgage market.

Experian shares ended the day down 45.25 pence, or 9.5%, at 429.5p.

'Market challenge'

Experian warned that as banks on both of the Atlantic reined in their lending to new customers, then there would be a slowdown in demand for credit checks.

We know this is temporary, but we don't see the end of it just yet Experian boss Don Robert See Experian's shares

"I've been in this business a long time and this is as big of a market challenge as I've seen in the last couple of decades," said Experian chief executive Don Robert.

He added that the company's financial services clients had deferred spending money on marketing to new customers, another factor in the weakening demand.

"We know this is temporary, but we don't see the end of it just yet," Mr Robert added.

Split up

Despite the problems going forward, Experian said that its sales from continuing operations had climbed by 14% to $1.9bn in the six months to the end of September.

Strong demand for its credit information services from credit card and car finance firms in the US and UK helped drive growth, it said.

In addition, its CreditExpert website in the UK and Consumer Direct in the US, which enables consumers to check their credit status directly, were also popular.

Experian used to be part of GUS, which also owned UK retailers Argos and DIY chain Home Base.

But GUS was split into two in October last year with Experian and Argos owner Home Retail Group gaining separate listings on the London Stock Exchange.