The sub-prime lender announced plans to raise £331m through a rights issue
Provident Financial has reported a pretax loss of £123m for 2017, compared with a pretax profit of £343.9m a year earlier following a disastrous decision to switch from commission-based agents to an in-house sales team, reports state.
The sub-prime lender also announced plans to raise £331m through a rights issue.
A rights issue priced at nearly half the share price last night will raise £300mln net to stabilise the financial position and enable the business to grow again, Malcolm Le May chief executive told media today.
He added: “When I became group CEO, I stated my key objective was to execute a turnaround of the Provident Financial Group. Today we have made progress on that objective by agreeing a settlement with the FCA in relation to its investigation into Vanquis Bank’s Repayment Option Plan and we now have a clear view on the estimated cost of the FCA investigation of Moneybarn.
“The Provident Financial Group’s businesses of Vanquis Bank, Provident Home Credit, Satsuma, and Moneybarn are all well positioned in their markets, with products that customers value and which operate well throughout the economic cycle. The recovery in Provident Home Credit is on track with collections performance continuing to improve.”
The 137-year-old Bradford company revealed that it had settled with the Financial Conduct Authority (FCA) over the questionable selling of an add-on loan product by its Vanquis Bank subsidiary — at a cost of £172.1m. Vanquis, a subsidiary of the lender, is being probed by the watchdog over potential mis-selling of the PPI-style product.