Provident appoints former boss to begin rescue

Provident Financial has moved to bring in expertise to its home credit business, which revealed catastrophic problems earlier this week.

The division was forced to announce that its transformation programme, which was expected to boost profits to around £150m, was now forecast to generate losses of between £80m-£120m.

Provident’s chief executive Peter Crook left the business with immediate effect and its shares crashed 66% on Tuesday, wiping £1.7bn off the company’s market value.

It has made small inroads into that in trading over the two days since, recovering around £200m. At last night’s close of 748p, Provident was valued at £1.1bn.

Provident Financial chairman Manjit Wolstenholme

Chris Gillespie, who ran the division until 2013, returns to the Bradford-based company and replaces Andy Parkinson.

Wolstenholme said: “My review of the business is ongoing as we move towards stabilising the Provident home credit business and improving the service to our customers.

“These are my first appointments and I intend to work closely with the new team on turning the home credit business around and to put a plan in place to deliver good results for the company.”

Before its very recent problems, much of the talk from Provident’s home credit management had been about the turnaround they had put in place since 2013.

Provident has said Gillespie’s focus “will be on re-establishing relationships with customers, bringing collections back to a normal level, and stabilising the operation of the business”.