U.K. subprime doorstep lender Provident Financial plunged 58% after reporting £80m-£120m full-year losses, resignation of its CEO and investigation by regulators, BBC News reports.
Tuesday's share price fall left the company’s shares price at 723p, just three months ago they were trading at 3,100p.
Bradford-based Provident Financial plc is a financial services group specializing in the provision of small and unsecured loans, which they collect in weekly installments. The Company's Credit Cards business was operated through Vanquis Bank.
The company management recently decided to changed the way the loans were collected by replacing self-employed agents with a smaller number of iPad-toting full-time "customer experience managers”.
Provident’s debt collection rates have dropped to 57% compared with a previous rate of 90% in 2016.
As a result the company’s chief executive, Peter Crook, has resigned.
Moreover, the U.K. Financial Conduct Authority started investigation against the Vanquis Bank credit-card unit, and the regulator had previously ordered Provident to stop offering a particular repayment product.
All this was too much for investors and resulted in a huge sell-off.
“Given that the FCA investigation has the potential to be material to the company, investors are likely to take the view that this investigation should have been disclosed when it was known. The shares are not investible until greater clarity is received, which may not be until next year,” RBC Capital Markets analyst Peter Lenardos said in a note.