Daily Management Review

British Provident Financial collapses by 57%


Shares of Provident Financial Plc showed record fall after reports that the company’s head Peter Crook is resigning. In addition, the British company specializing in risky lending, predicted a loss for the year and refused to pay dividends, reports Bloomberg.

Provident Financial
Provident Financial
Currently, Provident Financial expects that the business lending losses will number from £ 80 million ($ 103 million) to £ 120 million, the company said in a statement. In June, a profit of £ 60 million was projected. According to the statement, Manjit Wolstenholme will become the new executive director of Provident Financial.

Provident’s plan to replace workers with technology failed, and the company issued a profit warning for its consumer lending unit in June. On Tuesday, Provident refused to pay interim dividends and warned that payment of dividends for the whole year is also unlikely on the background of a deterioration in the business of lending and investigation of the British regulator with respect to its Vanquis Bank division.

Shares of Provident fell by 57% during trading in London at 8:35 local time. Thus, the value of the company was £ 1.12 billion. Since the beginning of the year, the value of shares has fallen by 73%.

The company sends agents to the homes of poor British, offering loans and often acting as debt collectors. Provident has experienced difficulties since it decided to replace 4,500 self-employed agents with 2,500 "customer managers" using the iPad.

Now, Provident Financial "determined that the group should protect equity and financial flexibility," the British creditor said in a statement.

source: reuters.com