“Clearly Awful News”: UK Subprime Lender Provident Crashes Most On Record, CEO Quits
As a result, shares of the Bradford, UK-based company dropped more than 73% to 521 pence in London morning trade. The stock is down 82% this year, wiping more than 3 billion pounds from its market value.
In what may be the beginning (of the end) of yet another subprime bubble bursting (we have lost count which one this is), in its second profit warning in two months, the subrime lender said it now expects a “pre-exceptional loss” for the home credit business of between 80 million pounds ($103 million) and 120 million pounds, after previously predicting a 60 million-pound profit. The company also cited further deterioration at its home credit business after a botched roll-out of new technology this year, when it scrapped a more-than-century-old model of self-employed door-to-door agents. Crook, who was CEO for a decade, said in June that many of its 4,500 salesmen and debt collectors quit or stopped working as hard when they were informed they would be replaced by a smaller number of iPad-toting full-time staff, according to Bloomberg.
Peter Crook
Meanwhile, the company said the U.K. Financial Conduct Authority is investigating the Vanquis Bank credit-card unit, and the regulator had previously ordered Provident to stop offering a particular repayment product, the company said Tuesday. Provident scrapped its interim dividend and said a full-year payout is also unlikely.
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