Provident shares plunge on news of second FCA probe
Shares in Provident Financial dropped more than 15% to 744p in morning trading after it announced the Financial Conduct Authority (FCA) has begun an investigation into its car finance business Moneybarn.
Shares are currently trading at 766p, down 113p (11am).
It is the second time in four months the Bradford-based group has confirmed an FCA investigation. In August it acknowledged the FCA was examining the repayment option plan (ROP) offered by its credit card business, Vanquis Bank.
The Moneybarn investigation relates to the processes applied to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties.
The FCA granted Moneybarn authorisation to conduct consumer credit activities in June 2016. It said that since that date the regulator “has continued to discuss certain processes with Moneybarn and Moneybarn has made a number of process improvements, including to the way it deals with future loan terminations”.
In response to the second FCA investigation, Provident Financial said: “The company will work collaboratively with the FCA to investigate the remaining concerns and resolve any outstanding related issues as soon as practicable.”
It is merely the latest problem for the crisis-hit group. Chief executive Peter Crook left in August after a second profits warning which caused one of the worst-ever day’s trading for a FTSE 100 company.
Manjit Wolstenholme stepped up as executive chairman as she sought to stabilise the group, but she died suddenly on November 24. Malcolm Le May was named as her interim replacement, becoming the third person in 100 days to lead the company.
