Door slams for Provident Lender’s shares crash amid chaos

MORE than £1.7billion was wiped off the value of doorstep lender Provident Financial yesterday as it was plunged into crisis.

Shares in the Bradford-based firm collapsed 66% after it dropped a series of stock market bombshells.

The company, founded in 1880, was forced to issue a second profit warning, it also suspended its half year dividend and long-term boss Peter Crook quit.

City watchdog the Financial Conduct Authority is also investigating one of the products offered by its Vanquis Bank arm.

At the heart of Provident’s problems is a shake-up of its door-to-door lending arm, which has for years relied on an army of self-employed agents who offer loans and collect weekly repayments. The

Oil = $51.87 firm switched to having directly-employed staff and “customer experience managers” but has struggled to recruit enough.

That caused a £9million a week fall in sales and a 57% slump in debt collections. Provident warned annual losses would be between £80m and £120m as a result.

Executive chairman Manjit Wolstenholme said: “I am very disappointed to announce the rapid deterioration in the outlook for the home credit business.”

Yet a bunch of hedge funds have made a killing on Provident’s troubles.

Lansdowne Partners was among those that banked millions of pounds by building short positions on the stock.

Provident offers doorstep loans of between £100 and £1,000. The APR on a loan over 13 weeks works out at 1,557%.

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