Provident staff facing the axe

Redundancy threat as shares plunge

STRUGGLING doorstep lender Provident Financial is set to axe jobs after suffering heavy losses.

Shares in the firm dived another 12% yesterday – wiping £170million off its stock market value – having crashed 75% since May last year after a string of profit warnings.

The latest fall came as Provident warned its consumer credit arm had lost around £120m last year. The Bradfordbased business signalled jobs would be lost within its 600-strong admin department.

Provident, founded in 1880, provided loans during the Wall Street Crash of 1929 and both World Wars. It has been rocked by a bungled shake-up of its doorstep lending arm, which has for years relied on an army of self-employed agents who offer loans and collect weekly repayments.

The firm switched to having directly-employed staff and “customer experience managers” but struggled to recruit enough.

Customer numbers and lending levels are recovering, the firm said yesterday, but are still way down on their peak.

To make matters worse, City watchdog the Financial Conduct Authority is investigating two of Provident’s offshoots, Moneybarn and Vanquis Bank. Meanwhile Provident still has no permanent chief executive in place. Gary Greenwood of Shore Capital said: “We now think an equity raise to replenish resources is increasingly likely, with a resumption of dividend payments also delayed.”

Interim executive chairman Malcolm Le May said: “I am pleased to report that good progress has been made towards restoring customer service in the home credit business and that we are engaged in a dialogue with the FCA with a view to reaching a resolution of the regulatory investigations at Vanquis and Moneybarn.”